Eurozone posts record trade deficit in August amid soaring energy prices

THE eurozone posted in August its largest trade deficit since it expanded to 19 countries in 2015, as high energy prices boosted its import bill, official estimates released on Friday (Oct 14) showed.

The European Union’s statistics office Eurostat said that the eurozone’s balance for trade in goods with the rest of the world in August was in the red by nearly 51 billion euros (S$70.7 billion), the highest deficit ever recorded by the bloc since Lithuania joined it in January 2015 to become its 19th member.

The deficit ballooned from July when it stood at 34 billion euros, marking the tenth consecutive month of a negative balance, in what is a major shift for the trade bloc which has historically recorded large surpluses.

The switch from surplus to deficit is largely the result of the bloc’s soaring bill for imports of energy.

In August, the eurozone increased its exports of goods by 24 per cent compared to the previous year, totalling 231.1 billion euros, roughly in line with the volume of exports in July.

But the rise in exports was lower than the import bill which rose by 53.6 per cent on the year to 282.1 billion euros.

For the wider 27-nation European Union, payments for energy imports have risen by 154 per cent in the period between January and August to 543.8 billion euros, contributing to an overall trade deficit of 309.6 billion euros.

Russia has been one of the chief beneficiaries, despite EU efforts to wean itself off Russian supplies over Moscow’s invasion of Ukraine. Imports from Norway, which is also a major gas supplier to the EU, have also increased sharply. REUTERS