The euro area trade surplus in December 2024 stood at €14.6 billion (seasonally adjusted), slightly above the €14.3 billion recorded in December 2023. The seasonally adjusted exports rose by 3.1 percent to €226.5 billion, while imports increased by 3.8 percent to €211.0 billion, reflecting strong external demand and higher import costs. The unadjusted annual trade surplus in 2024 surged to €176.9 billion, significantly higher than 2023's €57.4 billion, driven by a 3.7 percent decline in imports and a modest 0.6 percent rise in exports.

Sectoral shifts were notable. Chemicals and related products saw a marked decline in their trade balance, dropping from €23.0 billion to €20.6 billion, while machinery and vehicles gained traction, rising from €13.0 billion to €16.7 billion. Intra-euro area trade fell by 2.9 percent, indicating weaker internal demand or shifting trade patterns.

On a quarterly basis, exports and imports grew by 0.7 percent and 0.8 percent, respectively, while seasonally adjusted monthly figures showed marginal declines. Despite these fluctuations, the overall trade dynamics highlight resilience in external trade but suggest a rebalancing of sectoral contributions and internal trade shifts within the euro area. The latest update takes the RPI and RPI-P to 1 and 2, respectively, showing that economic activities are within the expectations of the euro area.

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.

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.