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Euro zone in trade deficit for third month as energy costs surge

Euro zone trade deficit widens as energy import cost surges
Euro zone trade deficit widens as energy import cost surges   -   Copyright  Thomson Reuters 2022
By Reuters

By Philip Blenkinsop

BRUSSELS – The euro zone’s trade balance was in deficit for the third consecutive month in January as surging energy prices led to a sharp increase in the value of imports, even before the Russian invasion of Ukraine prompted further price spikes.

Eurostat said the non-adjusted trade deficit of the 19 countries sharing the euro was 27.2 billion euros ($30.1 billion) compared with a 10.7 billion euro surplus a year earlier in January 2021.

Payments for imports jumped by 44.3% year-on-year, while revenues from exports grew by only 18.9%.

Euro zone trade is rarely in deficit, but this was the third consecutive month of shortfall, and a substantially larger figure than in the previous two months.

The euro zone last had a negative trade balance in January 2014 and last experienced deficits of more than one month in 2011.

Germany’s trade surplus fell by 78% from January 2021, France’s deficit deepened, while Italy turned from surplus to deficit.

Data for the whole 27-nation European Union showed the cost of energy product imports more than doubled in January from a year earlier, with marked increases also for imports of other raw materials, chemicals and machinery.

The EU’s trade deficits with energy supplier Russia more than doubled to 11.9 billion euros and with Norway grew from just 0.1 billion euros a year earlier to 5.8 billion euros. The deficit also nearly doubled with China to almost 34 billion euros, and widened with India and South Korea.

The EU maintained a surplus with the United States, Britain and Switzerland.

Adjusted for seasonal swings, the euro zone trade was also in deficit for a third consecutive month, although the 7.7 billion euro figure for January was slightly smaller than December’s 9.7 billion euro shortfall.