Oil prices dent eurozone trade surplus
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By Ralph Atkins in Frankfurt Published: August 19 2005 18:17 Last updated: August 19 2005 18:17
The eurozone's trade surplus in the first six months of 2005 shrunk to less than half the figure for the same period a year before as oil prices pushed up sharply the cost of energy imports.
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The trade data released by Eurostat, the European Union's statistical unit, highlighted the impact of higher oil prices on the world economy, threatening economic growth. But economists said that the generally strong import growth, while exports remained firm, might also be a sign of a pick-up in domestic demand, possibly heralding an improvement in the eurozone economic outlook.
Strong growth in imports "could be seen as a positive sign if they are used as inputs for production or consumed. The US consumes a lot and imports a lot, which is not seen as a weakness in the US," said Dirk Schumacher, economist at Goldman Sachs in Frankfurt, who said German imports had grown strongly in the second quarter.
The €17.3bn ($21bn, £11.7bn) trade surplus in the six months to June compared with a €41.1bn surplus in the first half of 2004 and was the smallest first half surplus reported for the eurozone since 2001.
Imports in the first half of 2005 were 10 per cent higher than a year before, while exports were up 5 per cent. Detailed results for the first five months of the year showed energy imports were up 41 per cent. But there were significant rises in other areas: machinery and vehicle imports were up by 4 per cent, "other manufactured articles" rose 10 per cent and chemical imports by 12 per cent.
The European Central Bank hopes for an improvement in eurozone economic activity in the second half of the year. But fears about the French economy heightened on Friday after figures showing domestic demand - which has previously accounted for much of France's relatively robust growth performance - contracted significantly in the second quarter. French private consumption fell by 0.3 per cent compared with the previous three months, after a 0.8 per cent rise in the first quarter.
In Germany, business confidence surveys have shown prospects appearing to brighten. But in a research note, Munich-based HVB bank argued that eurozone businesses and consumers, especially in Germany, were "still exercising great restraint when it comes to investment, employment and consumption. The primary reason for this is the lack of far-reaching reforms. Therefore the looming upswing will be a moderate and short-lived one."
By Ralph Atkins in Frankfurt Published: August 19 2005 18:17 Last updated: August 19 2005 18:17
The eurozone's trade surplus in the first six months of 2005 shrunk to less than half the figure for the same period a year before as oil prices pushed up sharply the cost of energy imports.
//
The trade data released by Eurostat, the European Union's statistical unit, highlighted the impact of higher oil prices on the world economy, threatening economic growth. But economists said that the generally strong import growth, while exports remained firm, might also be a sign of a pick-up in domestic demand, possibly heralding an improvement in the eurozone economic outlook.
Strong growth in imports "could be seen as a positive sign if they are used as inputs for production or consumed. The US consumes a lot and imports a lot, which is not seen as a weakness in the US," said Dirk Schumacher, economist at Goldman Sachs in Frankfurt, who said German imports had grown strongly in the second quarter.
The €17.3bn ($21bn, £11.7bn) trade surplus in the six months to June compared with a €41.1bn surplus in the first half of 2004 and was the smallest first half surplus reported for the eurozone since 2001.
Imports in the first half of 2005 were 10 per cent higher than a year before, while exports were up 5 per cent. Detailed results for the first five months of the year showed energy imports were up 41 per cent. But there were significant rises in other areas: machinery and vehicle imports were up by 4 per cent, "other manufactured articles" rose 10 per cent and chemical imports by 12 per cent.
The European Central Bank hopes for an improvement in eurozone economic activity in the second half of the year. But fears about the French economy heightened on Friday after figures showing domestic demand - which has previously accounted for much of France's relatively robust growth performance - contracted significantly in the second quarter. French private consumption fell by 0.3 per cent compared with the previous three months, after a 0.8 per cent rise in the first quarter.
In Germany, business confidence surveys have shown prospects appearing to brighten. But in a research note, Munich-based HVB bank argued that eurozone businesses and consumers, especially in Germany, were "still exercising great restraint when it comes to investment, employment and consumption. The primary reason for this is the lack of far-reaching reforms. Therefore the looming upswing will be a moderate and short-lived one."
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