Eurozone exports soar in April; surplus widens

Exports from the eurozone to the rest of the world climbed in April, pushing its trade surplus wider and indicating that the currency area’s modest recovery remained on track as the second quarter got underway.

Trade has been one of the eurozone economy’s weak spots over recent quarters, with imports growing more rapidly than exports during the first quarter, acting as a drag on growth. Instead, rising household spending and a pickup in investment spending have driven economic growth.

The European Central Bank has warned that weakening growth in China, Russia and other large developing economies would hinder the eurozone’s recovery by damping demand for its exports. If sustained, April’s exports surge would ease those worries.

The European Union’s statistics agency Wednesday said the eurozone exported goods worth EUR27.5 billion ($31 billion) more than the goods it imported during April, a wider surplus than the EUR20.9 billion recorded in the same month last year.

On a seasonally adjusted basis, exports rose by 4.9% from March, while imports rose by 2.6%, while the trade surplus widened to EUR28.0 billion from EUR23.7 billion in March.

The rise in exports follows figures released on Tuesday that showed eurozone industrial output rose for the first time in three months during April.

The eurozone economy picked up in the first three months of the year, outpacing both the U.S. and the U.K. But economists expect the eurozone to slightly in this quarter, while growing at an unchanged pace of 1.6% over 2016 as a whole. That view is shared by economists at the ECB. However, policy makers have warned of a range of threats to that trajectory, including the outcome of a June 23 vote in the U.K. on whether to remain in, or leave the EU.

Source: MarketWatch