Eurozone swings to trade surplus in March

The eurozone unexpectedly swung to a trade surplus in March from a month earlier, first official estimates showed on Monday, confirming economic strengthening in the single currency area despite expensive oil.
Eurostat said the surplus came to 1.2 billion euros ($1.5 billion) without seasonal adjustment, compared with a 3.1 billion deficit in February and beating economists' consensus forecasts of a 3.1 billion euro shortfall.
A year earlier, the 12-nation currency area logged a trade surplus of 4.0 billion euros.
"Healthy export growth has played a key role in the eurozone economy's improvement since mid-2005, so it is particularly encouraging to see that eurozone exports rose by a seasonally adjusted 1.2 percent month-on-month in March," said Howard Archer, economist at Global Insight.
Seasonally adjusted data showed a trade surplus of 0.3 billion euros in March, reversing a deficit of 2.8 billion in the previous month as exports increased by 1.2 percent month-on-month and imports fell 1.5 percent.
A detailed breakdown for March was not available, but February non-seasonally adjusted data showed the deficit in energy trade growing to 41.9 billion euros in the first two months of 2006 from 26.5 billion in the same period of 2005.
Imports from energy exporters Russia and Norway jumped 48 percent in both cases, with exports to those countries rising only 25 and 17 percent.
The eurozone's biggest trade deficit of 14.9 billion euros was, however, with China in February, up from 10.9 billion a year earlier.
The surplus in manufactured goods inched up to 30.2 billion euros in January-February from 29.4 billion in the like period of 2005, but analysts cautioned about excessive optimism for the rest of the year, citing a recent appreciation in the euro.
"It needs to be borne in mind that the euro largely traded around $1.20 through the first quarter of 2006, so its recent marked appreciation will not yet be reflected in the trade data," Archer said.
Eurostat recently estimated that eurozone growth doubled to 0.6 percent in the first quarter from the last three months of 2005, cementing expectations that the European Central Bank will raise its main rate by 0.25 point from 2.5 percent in June.
The executive European Commission this month raised its eurozone growth forecast to 2.1 percent in 2006 from 1.9 percent, citing robust investment and exports, notably in Germany, supported by expected global growth of 4.6 percent this year.