The Euro area trade deficit narrowed more than expected in February from the previous month, lifted by declining imports.
The Eurostat reported on Friday that the trade deficit narrowed to EUR 2 billion in February from January's revised EUR 10.9 billion deficit. Economists had expected the deficit to contract to EUR 5 billion.
After adjusting for seasonal variations, the trade balance recorded a deficit of EUR 4 billion in February versus EUR 5.4 billion shortfall in January. The adjusted deficit narrowed more than the expected deficit of EUR 4.9 billion.
Seasonally adjusted exports rose 0.5% month-on-month, while imports fell 0.8%. This follows an 11.9% decline in exports in January and an 8.3% fall in imports. Year-on-year, exports and imports were down 24% and 21%, respectively.
The first estimate for the February extra-EU27 trade showed a deficit of EUR 10.6 billion, smaller than the EUR 13.3 billion deficit seen in the same period of 2008. The shortfall also stood below EUR 27.2 billion deficit in January 2009.
A more detailed version of February trade is not available now, which would be published next month.
The report gave a detailed breakdown of January trade. Euro area's trade with U.S. resulted in a surplus of EUR 1.8 billion in January, down from EUR 4 billion in the prior year. Meanwhile, surplus with the U.K narrowed to EUR 3.5 billion from EUR 4.9 billion. At the same time, the deficit with Russia fell to EUR 2.7 billion from EUR 4.6 billion on slowing imports.
In January, the EU27 energy deficit decreased to EUR 20.7 billion from EUR 31 billion January 2008, while the surplus fell for chemicals to EUR 4.6 billion and that for machinery and vehicles to EUR 2.8 billion.
The European Union's statistics office found that trade flows of EU 27 with all its major trading partners declined in January. Exports to Turkey showed the largest reduction of 44%, which was followed by Russia and India. Meanwhile, imports from Russia plummeted 37% and that from Turkey tumbled 33%.
Concerning the total trade of Member States, the largest surplus was registered in Germany, while the UK reported the biggest deficit.
In March, the World Trade Organization had said global trade would decline 9% in 2009, which would be the biggest contraction since the Second World War. The collapse in global demand brought on by the biggest economic downturn in decades will drive exports down by roughly 9% in volume terms in 2009, the trade body said.
The WTO assessed that taking the European Union as a single entity and excluding internal EU trade, the five leading exporters were the European Union, China, the United States, Japan and Russian Federation.
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