Eurozone Trade Surplus At 5-Month Low

(RTTNews) - Eurozone's trade surplus declined more-than-forecast to a 5-month low in August, as exports declined and imports rose, figures from Eurostat showed Friday.

Another report from the statistical office confirmed that deflation returned to the currency bloc in September after five months.

The trade surplus of euro area fell to a seasonally adjusted EUR 19.8 billion from EUR 22.4 billion in July. It was below the expected level of EUR 22.1 billion and the lowest since March, when it totaled EUR 17.4 billion.

Exports fell 1.3 percent from July, while imports grew 0.2 percent.

However, on a non-seasonally adjusted basis, the trade surplus rose to EUR 11.2 billion from EUR 7.4 billion from a year ago as exports rose 6 percent. Imports increased only 3 percent from the prior year.

For the EU28, the seasonally adjusted trade surplus was EUR 5.5 billion in August, smaller than the EUR 6.6 billion in the previous month. Exports dropped 1.6 percent month-over-month and imports declined 0.9 percent.

During the January to August period, euro area exports advanced 6 percent and imports climbed 3 percent. The trade surplus totaled EUR 156.9 billion versus EUR 104.5 billion in the same period of last year.

Jessica Hinds, an economist at Capital Economics, suspects that the trade surplus will narrow further over the coming months.

Nonetheless, the economist said trade figures add to the recent run of weak August data from the euro area and, as such, provide further evidence that the economic recovery is unlikely to have gained pace in the third quarter.

In a separate communique, Eurostat said consumer prices fell 0.1 percent in September from prior year, in line with flash estimate, offsetting a 0.1 percent rise in August. It was the first fall in prices since March.

The European Central Bank targets to bring inflation to 'below, but close to, 2 percent over the medium term'.

Excluding energy, food, alcohol and tobacco, core inflation remained unchanged at 0.9 percent in September. The core rate also matched the preliminary estimate published on September 30.

On a monthly basis, consumer prices rose 0.2 percent in the euro area and by 0.1 percent in EU.

The ECB is currently buying EUR 60 billion bonds a month to boost prices. In September, the central bank downgraded its inflation outlook, citing lower oil prices and the exchange rates.

ECB Governing Council member Ewald Nowotny said Thursday new measures are required to achieve price stability as core inflation is clearly below the target.

Inflation is forecast to be 0.1 percent in 2015 and rise to 1.1 percent the next year. "We will clearly miss our target," Nowotny said.