Eurozone trade surplus surges in April

The Eurozone’s annual trade surplus rose to nearly €11bn in April, official data showed on Tuesday, though that was below most analyst forecasts.

According to Eurostat, the European Union’s statistics office, the first estimate for exports of goods to the rest of the world was €193.8bn, up 43.2% year-on-year. Imports rose 37.4% to €182.8bn, meaning the trade surplus was €10.9bn, compared to just €2.3bn a year ago, when both imports and exports were heavily impacted by Covid-19 containment measures.

The growth in exports was helped by a recovery in machinery and vehicles, with exports from the whole of the EU improving 11.9% in the four months to April end.

However, analysts had been expecting a bigger trade balance, nearer to €15.8bn. And month-on-month, the seasonally-adjusted surplus fell sharply, sliding to €9.4bn in April from an upwardly-revised €18.3bn in March. Analysts had been expecting a month-on-month surplus closer to €15.obn.

The EU’s deficit with China - its biggest trading partner - widened to €65.6bn in the first four months of the year, while the trade surplus with both the US and UK increased, to €54.1bn and €46.2bn respectively. Imports from the UK dropped "significantly", Eurostat said, following the end of the transition period, off 27.1% in same period. Exports to the UK declined just 3.3%.

Across the wider EU, the first estimate for extra-EU exports of goods was €179.0bn, up 43.4% on April 2020. Imports rose 32.8% on the same basis to €166.0bn, giving a trade surplus of €13.0bn.

Claus Vistesen, chief Eurozone economist at Pantheon Macroeconomics, said: "These numbers are starting to worry us now, a little bit. Taken at face value, the Eurozone’s external surplus dropped to a near-decade low at the start of the second quarter, only a bit shy of the crash in April last year during the first lockdown.

"That’s difficult to believe, given the steady upturn in global demand over that period, and note also the pattern in the headline numbers: a big drop on the month accompanied by a big upward revision of the previous month’s data, indicating that today’s number will be revised in due course."