Britain's economy was dragged down by net trade in the first quarter of 2012 despite a rebound in sales to non-EU countries in March, data showed on Tuesday. While the rise in demand from countries such as the United States and China kept hopes alive that stronger economic growth lay ahead, the persistent euro zone debt crisis cast a dark shadow over the chances of an export-led recovery in Britain.
The country has not fully recovered from a 2008-2009 slump and fell back into recession at the start of this year. The government has been hoping that exports will balance the hit to growth from its austerity plan, aimed at erasing a huge budget deficit. The Office for National Statistics said the goods trade deficit inched down to 8.56 billion pounds in March from 8.59 billion pounds in February. The fall in the goods trade deficit with non-EU countries was more pronounced, taking them to 4.11 billion pounds from 4.87 billion pounds in February.
The volume of British goods exports grew by 0.2 percent in the first quarter, the ONS said, but imports increased by 0.3 percent, suggesting that trade was one of the reasons why the economy shrank by 0.2 percent in the first quarter. A first estimate of the GDP components will be published on May 24.