BRUSSELS: A weaker euro helped boost exports of goods from the eurozone to the rest of the world in March, pushing the currency area’s trade surplus higher and aiding its economic recovery.
Figures also released on Tuesday by the European Union’s statistics agency confirmed that eurozone consumer prices stopped falling in April after four straight months of decline.
Eurostat said the 19 countries that use the euro had a surplus in their trade in goods of €23.4 billion ($US26.2 billion), up from €16.1 billion in March 2014.
That widening gap was due to an 11 per cent increase in exports, while imports were up by 7 per cent. Over the first three months of the year, exports were up 5 per cent from the same period last year, while imports were unchanged.
The euro has been depreciating against the US dollar and other major currencies since May 2014, a slide that continued into the first quarter of 2015 with the launch of the European Central Bank’s program of quantitative easing. That will involve the purchase of more than €1 trillion of mostly government bonds using freshly created money through September 2016, increasing the supply of euros.
The euro has strengthened slightly over in recent weeks as a pickup in eurozone growth suggested the ECB’s new stimulus is working, while disappointing growth figures from the US weakened the US dollar. However, the euro dipped again Tuesday as an ECB official said purchases of government bonds will be stepped up this month and next in anticipation of lower purchases in the summer vacation months of July and August.
Although policy makers stress that a weaker exchange rate isn’t their primary goal in launching QE, they are counting on a weaker euro to help boost exports and revive economic growth. Exporters said the boost to date hasn’t been dramatic.
We are currently not seeing a massive increase in export volumes to the US,” said Rainer Hundsdoerfer, chairman of Germany’s ebm-papst group, a manufacturer of electric motors and fans. “But the weaker euro should certainly support our business in the coming months and we expect for the current financial year US sales growth of about 6 per cent.”
