| Actual | Previous | Revised | |
|---|---|---|---|
| Balance | €-15.2B | €-28.3B | €-28.1B |
| Imports - M/M | -3.8% | -3.2% | -3.3% |
| Imports - Y/Y | 20.2% | 30.7% | |
| Exports - M/M | 1.0% | -0.4% | -0.5% |
| Exports - Y/Y | 17.2% | 18.0% | 17.9% |
Highlights
The merchandise trade balance improved again in November. The seasonally adjusted shortfall fell from October's downwardly revised €28.1 billion to €15.2 billion, a 9-month low. Unadjusted, the balance was in an €11.7 billion deficit up from €3.9 billion a year ago.
The monthly narrowing in the adjusted gap reflected a 1.0 percent monthly increase in exports combined with a 3.8 percent drop in imports. Unadjusted annual growth of exports now stands at 17.2 percent, reducing the gap with imports (20.2 percent) to only 3 percentage points.
With a deficit of fully €600.5 billion over the first 11 months of 2022, up from €248.2 billion in the same period in 2021, the energy sector continues to dominate the overall trade deficit. However, declining energy prices are now reducing the red ink and should continue to do so in the December report.
The monthly narrowing in the adjusted gap reflected a 1.0 percent monthly increase in exports combined with a 3.8 percent drop in imports. Unadjusted annual growth of exports now stands at 17.2 percent, reducing the gap with imports (20.2 percent) to only 3 percentage points.
With a deficit of fully €600.5 billion over the first 11 months of 2022, up from €248.2 billion in the same period in 2021, the energy sector continues to dominate the overall trade deficit. However, declining energy prices are now reducing the red ink and should continue to do so in the December report.
Definition
The merchandise trade balance measures the difference between imports and exports of goods. The level of the international trade balance, as well as changes in exports and imports, indicate trends in foreign trade. For the Eurozone, monthly data are available for trade in goods; statistics on services are released as part of the overall quarterly current account report. The headline trade data are not adjusted for seasonal factors and so should only be viewed in relation to the outturn a year ago. However, seasonally adjusted figures available elsewhere in the report do allow for monthly comparisons.
Description
Changes in the level of imports and exports, along with the difference between the two (the trade balance) are a valuable gauge of economic trends here and abroad. While these trade figures can directly impact all financial markets, they primarily affect the value of the local currency dollar in the foreign exchange market.
Imports indicate demand for foreign goods and services. Exports show the demand for Eurozone goods in countries overseas. The euro can be particularly sensitive to changes in the balance since a trade deficit/surplus can create greater/reduced demand for foreign currencies. The bond market is also sensitive to the risk of importing inflation. This report gives a breakdown of EMU trade with major countries as well, so it can be instructive for investors who are interested in diversifying globally. For example, a trend of accelerating exports to a particular country might signal economic strength and investment opportunities in that country.
Imports indicate demand for foreign goods and services. Exports show the demand for Eurozone goods in countries overseas. The euro can be particularly sensitive to changes in the balance since a trade deficit/surplus can create greater/reduced demand for foreign currencies. The bond market is also sensitive to the risk of importing inflation. This report gives a breakdown of EMU trade with major countries as well, so it can be instructive for investors who are interested in diversifying globally. For example, a trend of accelerating exports to a particular country might signal economic strength and investment opportunities in that country.
