Euro zone sees 5.8% fall in exports in August

Euro zone sees 5.8% fall in exports in August

Official figures from Eurostat have revealed a 5.8% fall in exports in August in the euro zone compared with July.

However, imports fell by a more modest 1.3%, suggesting a slump in global and internal demand and raises fears about a recovery in the region.

As exports fell by more than imports, the euro zone trade balance with the rest of the world fell into deficit in August after a big surplus in July.

According to Eurostat, the deficit was €4 billion (£3.7 billion), compared with a surplus of €12.3 billion the previous month.

Commenting on the figures, Howard Archer, economist at IHS Global Insight, said: “It is worrying for euro zone recovery prospects to see that seasonally adjusted exports plunged by as much as 5.8% month-on-month in August, which more than wiped out the gains of the previous two months.”

The euro zone, which comprises 16 countries, is still officially in recession. However its number 1 and 2 economies, Germany and France, have exited recession after experiencing positive growth in the second quarter.

Earlier this month, the European Central Bank (ECB) elected to keep interest rates for the euro zone on hold at the record low of 1%.

The move came as policymakers are uncertain about recovery within the region after official figures revealed that the economy contracted by 0.2% in the April to June period - revised from the 0.1% previously reported.

In the meantime, the unemployment rate in the euro zone hit 9.6% in August - the highest in over a decade after the number of jobless rose by 165,000 during the month, bringing the total jobless number using the single currency bloc to 15.17 million.

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