Euro-area exports rise for first time in three months

Euro-area exports increased for the first time in three months, led by a rebound in Germany, while inflation held steady at 1.6 per cent as the economy gathers strength after the longest recession since the debut of the single currency.

Exports from the 17-nation area rose a seasonally adjusted 3 per cent in June from May, when they dropped 2.6 per cent, the European Union’s statistics office in Luxembourg said today.

Shipments from Germany, Europe’s biggest economy, gained 6.3 per cent, after a 9 per cent decline the prior month. The euro- area inflation rate remained at 1.6 per cent in July, a separate report showed.

Europe’s economy emerged from a record-long recession in the second quarter, expanding for the first time since 2011. Accelerating growth in the US, the world’s largest economy, and relative calm on financial markets have helped the euro area begin to recover.

The European Central Bank has cut interest rates to a record low and pledged to keep them there or lower for an "extended period" to foster growth.

“The euro zone’s growth will mainly be driven by increased demand from the US and emerging economies,” Moody’s Analytics said in an August 15th report. “A slowdown in these markets is the main risk to the outlook, along with any deterioration in the euro zone’s internal situation.”

Euro-zone imports increased 2.5 per cent in June after a 2.1 per cent decrease the prior month, and the trade surplus increased to €14.9 billion from €13.8 billion.

Exports from France, the second-biggest euro-area economy, fell 1.7 per cent, while Italian shipments rose 1.4 per cent, today’s data showed. Spanish exports dropped 2.4 per cent.

The 1.6 per cent inflation rate matched an initial estimate on July 31st. It is the sixth straight month that the rate has been less than the ECB’s 2 per cent ceiling.

Gross domestic product in the euro area rose 0.3 per cent in the April-June period after a 0.3 per cent contraction in the previous three months, the statistics office said on August 14th. Germany and France both showed faster-than-projected expansions in the quarter.

Still, the recession has pushed the unemployment rate to a record 12.1 per cent and areas of southern Europe remain in a slump, with more than half of young people in Spain and Greece out of work.

“A subdued recovery remains the most likely scenario,” said Peter Vanden Houte, an economist at ING Bank NV in Brussels. “Confidence remains fragile.”

(Reuters)