🐂 Not all bull runs are created equal. November’s AI picks include 5 stocks up +20% eachUnlock Stocks

UPDATE 1-Euro zone Sept trade in surplus, shows contrib to GDP

Published 11/17/2009, 06:16 AM
Updated 11/17/2009, 06:18 AM

(Adds economists' comments)

By Jan Strupczewski

BRUSSELS, Nov 17 (Reuters) - Recovering exports produced an unexpected trade surplus for the euro zone in September, data showed on Tuesday, pointing to a positive contribution to growth in the third quarter and beyond.

The European Union's statistics office Eurostat said the seasonally unadjusted external trade surplus in the 16 countries using the euro was 3.7 billion euros in September against market expectations of a 2 billion euro deficit in a Reuters poll.

"The recent improving trend in the euro zone's net trade performance reinforces belief that it was a significant factor in the region's return to growth in the third quarter, and September's trade data boosts hopes that it can contribute further in the fourth quarter," said Howard Archer, economist at IHS Global Insight.

Eurostat also revised upwards August trade data to deficit of 2.3 billion euros rather than the previously reported 4 billion euros. In September 2008, the deficit was 6 billion.

The euro zone returned to growth in the third quarter with a 0.4 percent quarter-on-quarter economic expansion after five quarters of contraction. The European Commission expects the economy will grow 0.2 percent in the last three months of 2009.

Unadjusted data showed that while still well below last year's levels, exports were recovering in year-on-year terms.

The annual exports fall was 18 percent in September against 21 percent in August. Imports improved less -- they were 24 percent lower than in September 2008, against a 26 percent fall in August signalling soft domestic demand.[ID:nBRQ009595]

Adjusted for seasonal swings, the euro zone had an even bigger trade surplus o 6.8 billion euros in September, up from 2.2 billion in August, as exports jumped 5.5 percent month-on-month and imports rose only 1.1 percent.

"While these figures measure the value of trade in goods rather than the volume of trade in goods and services, they do suggest that net trade probably made a clear positive contribution to quarterly GDP growth in Q3," said Martin van Vliet, economist at ING bank.

"A closer examination of the trade figures shows that the export turnaround was mainly driven by a rebound in demand from Asia -- U.S. demand for euro zone export goods continued to weaken," he said.

In August exports fell 4.1 percent month-on-month and imports declined 1 percent in seasonally adjusted.

The trade surplus in September comes despite the euro then hitting a 12-month high against the U.S. dollar after a steady climb since the start of March and a rise in the trade weighted value of the euro in September to 116.32 from 113.99 , in a sign demand factors have a greater impact on trade than exchange rates.

But continued euro gains are likely to have an adverse effect on trade, economists said.

"With the strong euro hurting exporter price competitiveness, many euro zone exporters will continue to struggle for some time to come. There is still a long way to go before the export sector fully recovers," van Vliet said. (Reporting by Jan Strupczewski, editing by Chris Pizzey)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.