Commentary Directory

Euro Area Trade: July 2023

Jacob Hess
September 15, 2023

Euro Area Trade

9/15/2023 (July 2023)

€6.5 bil (-€18.1 bil MoM)

Below Expectations

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Exports -9.7% MoM
Imports -3.5% MoM

The euro area trade surplus fell by -€18.1 bil to just €6.5 bil in July. Exports crashed on the month, down -9.7% MoM, which caused the annual change in exports to turn negative, from 0.3% YoY in June to -2.7% YoY in July. Imports also fell but to a lesser extent, down -3.5% MoM. Imports from outside the euro area continued to trend sharply lower for the year, down -18.2% YoY. Trade within the euro area was also very weak, falling 4.8% MoM and -7.9% YoY. Weaker imports and exports of energy primary goods are the main reason for the slowdown in trade, down -28.1% and -22.6% in the current YTD period vs the previous YTD period. The trade balance is also suffering from a slowdown in the increase of exports of manufactured goods, up 5.2% YTD in July vs up 5.8% YoY in June.

From Eurostat

The sharp decline in exports is a bad sign for growth in the euro area in Q3. The trade balance has been bouncing from a deep deficit ever since August 2022. This has mostly been a result of lower energy import more than anything. The recently recovered euro area trade surplus is now potentially in danger.