Strong trade data offers EU light at end of the tunnel

The European Union posted a strong set of trade figures in April, boosting hopes that the economy is turning the corner after months in the doldrums, official figures showed on Monday. The 17-nation eurozone had a trade surplus of 14.9 billion euros ($20.0 billion) in April, down from a record 22.5 billion euros in March but still strong enough to suggest the economy will escape recession in the three months to June. A trade surplus is one of the factors of growth in an economy, whereas a deficit tends to sap growth, and so achieving a trade surplus is of critical importance to economies in crisis. Countries in Europe which have run into deep problems over the size of the public deficits and debt are trying to recover with reforms to control public finances and to raise efficiency in their economies, notably to boost exports. The other factors of growth in an economy are public spending, investment and consumption. For example, the biggest economy in the EU, Germany, has a big trade surplus which bolsters the overall EU figures, whereas the second economy, France, has a big trade deficit and has relied mainly on consumption to boost growth. In the eurozone, compared with March, April exports were down 0.8 percent while imports rose 0.5 percent, the EU statistics agency Eurostat said. In April 2012, the eurozone posted a smaller surplus of 3.3 billion euros. The 27-member European Union recorded an April trade surplus of 9.2 billion euros, down from 15.9 billion euros in March but much better than the deficit of 13.4 billion euros reported in April 2012, Eurostat said. Howard Archer at IHS Global Insight said the April figures support hopes that a positive trade balance can help stop the eurozone economy contracting for a seventh quarter running in the three months to June. Sustained export growth so far this year, despite the slippage in April, "looks to be a pretty decent performance given muted and stuttering global growth," Archer said in a note. At the same time, "it is vitally important for the eurozone that global growth improves as 2013 proceeds, thereby boosting exports and facilitating the single currency area's exit from recession that has now lasted a record six quarters," he said.