Europe Posts Trade Surplus in May as Imports Fall
Europe posted a trade surplus for a second month in May as exports declined less than imports.
Shipments from the 16-nation euro area fell a seasonally adjusted 2.7 percent from April, when they dropped 0.7 percent, the European Union’s statistics office in Luxembourg said today. Imports slipped 2.8 percent, swelling the trade surplus to 800 million euros ($1.1 billion) in May from 700 million euros.
Governments around the world have announced $2 trillion of stimulus measures to drag their economies out of the worst recession in six decades and the European Central Bank has cut its benchmark interest rate to a record low of 1 percent. While evidence is mounting that the global recession is easing, rising unemployment may still keep a lid on European domestic spending.
“Domestic demand is still very weak in the euro area,” said Colin Ellis, European economist at Daiwa Securities in London. “I don’t expect to see consumption being a strong engine of growth in Europe. It’ll still be exports that pull them out.”
The euro was little changed after the data and traded at $1.4097 at 11:47 a.m. in London. That’s down 0.4 percent from yesterday. Construction output fell 2 percent in May, separate data showed today.
The International Monetary Fund predicts the euro region will be the worst performing major economy next year and unemployment rose to 9.5 percent in May, the highest since 1999. The Washington-based lender sees the bloc’s economy shrinking 0 no fax cash advance.3 percent after a 4.8 percent contraction in 2009. It predicts that the U.S., Canada, the U.K. and Japan will return to growth.
China
Exports to China dropped in the first four months of the year, today’s report showed. Sales to the world’s third-largest economy declined 8 percent in the period from a year earlier.
That was less than the decline in shipments to other countries. Exports to the U.K., the largest market for euro-area goods, fell 27 percent and sales to the U.S. dropped 22 percent. The national breakdown is published with a one-month lag.
China may nevertheless help to shore up global trade in coming months, driving growth around the world, the IMF said July 8. Gross domestic product grew 7.9 percent in the second quarter as China became the first of the major economies to rebound from the global recession.
German cement maker HeidelbergCement AG said July 8 it saw initial signs of improvement in some markets, led by stronger sales in Asia.
The ECB expects the euro region’s economy to resume expansion in the middle of 2010. The ECB, which has pumped billions of euros into markets, kept its benchmark interest rate at a record low of 1 percent on July 2 and has announced plans to buy as much as 60 billion euros of covered bonds, securities backed by mortgages and public-sector loans.
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