| Actual | Previous | Revised | |
|---|---|---|---|
| Balance | €-0.9B | €-7.1B | €-8.0B |
| Imports - M/M | -0.1% | 5.9% | 4.8% |
| Imports - Y/Y | -12.8% | -11.9% | -12.9% |
| Exports - M/M | 2.9% | -3.2% | -3.8% |
| Exports - Y/Y | -2.3% | -3.6% | -4.1% |
Highlights
The seasonally adjusted merchandise trade balance remained in deficit in May, albeit only just. Following a larger revised €8.0 billion shortfall in April, the gap narrowed sharply to €0.9 billion. Unadjusted, the balance showed a €0.3 billion deficit, a marked improvement on the €30.3 billion recorded a year ago.
The sharp monthly improvement reflected a 2.9 percent increase in exports and a 0.1 percent dip in imports. The trend in the former is broadly flat while the latter continues to head lower. Annual export growth now stands at minus 2.3 percent while imports are 12.8 percent lower on the year. Overall EU exports to Russia over the first five months of 2023 fell 30.6 percent versus the same period in 2022 while imports from Russia were down some 74.8 percent.
The sharp monthly improvement reflected a 2.9 percent increase in exports and a 0.1 percent dip in imports. The trend in the former is broadly flat while the latter continues to head lower. Annual export growth now stands at minus 2.3 percent while imports are 12.8 percent lower on the year. Overall EU exports to Russia over the first five months of 2023 fell 30.6 percent versus the same period in 2022 while imports from Russia were down some 74.8 percent.
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.
