Eurozone imports fall steeply in May

Eurozone imports fall steeply in May

BRUSSELS - Reuters
The eurozone’s trade surplus widened in May from a year earlier, driven mainly by falling imports rather than export growth, the EU’s statistics office, Eurostat, said yesterday.

Eurostat also confirmed June annual inflation at 1.6 percent, pushed upward by volatile energy and food prices, from 1.4 percent in May.

The trade surplus for the 17 countries using the euro, unadjusted for seasonal swings, rose to 15.2 billion euros ($19.8 billion) in May, from a revised 14.1 billion euro surplus in April.

Overall exports were flat on the year in May, with imports decreasing by 6 percent.

The malaise in imports underscores the euro zone’s struggle to revive domestic demand that is hampered by record unemployment, reluctance among consumers to spend and companies that are struggling to access credit and invest.

Imports fell in the bloc’s four largest economies, with Germany reporting a 1 percent drop, France declining by 2 percent, Spain down 4 percent and Italy sliding 6 percent.

Trade with China fell on the year in May, on a non-seasonally adjusted basis, while exports to the United States increased by 2 percent, with imports down by 7 percent.

Exports help: ECB

Inflation, meanwhile, remains below the European Central Bank’s target of close to but below 2 percent.

The ECB left its key interest rate at a record low in July and broke a taboo never to pre-commit on rates, saying it would leave monetary policy loose for an extended period of time to help an expected recovery later this year.

The ECB sees exports, low interest rates around the world and less volatility on financial markets as helping the eurozone leave behind its longest recession since the creation of the single currency in 1999.