Europe Posts Biggest Trade Gap in Euro’s History

Europe recorded the biggest trade deficit in 2008 since the euro’s introduction 10 years ago as higher oil prices boosted energy costs and the global financial crisis curtailed exports., Bloomberg 2/17/2009 5:32:45 AM

The region’s trade deficit of 32.1 billion euros ($40.5 billion) compared with a surplus of 15.8 billion euros in 2007, the European Union’s statistics office in Luxembourg said today.

The spreading of the global recession is curbing demand for European products, adding to pressure on the economy, which shrank the most in 15 years in the fourth quarter. Volkswagen AG, Europe’s largest carmaker, said deliveries fell about 20 percent last month and that sales in the export markets of Brazil, Russia, India and China have been particularly hit” by the credit freeze.

In December, exports fell a seasonally adjusted 0.9 percent from November, the report showed. Imports declined 3.9 percent from the previous month. The deficit narrowed to 300 million euros in December from 4 billion euros in November.

Exports to the U.S., the second-biggest buyer of euro area goods, fell 5 percent in the 11 months through November from a year earlier. Sales to the U.K., the main destination for the region’s products, dropped 3 percent. Detailed data are published with a one-month lag.

Sales to China rose 10 percent in the 11-month period, slower than the 15 percent pace recorded in the first half of the year. Exports to Russia grew 16 percent, compared with 20 percent in the first half.

Daimler AG, the world’s second-biggest maker of luxury cars, reported its first quarterly loss since 2007 today and said it will cut production as sales decline. Rotterdam Port, Europe’s largest seaport, expects decline of as much a 8 percent in throughput this year, as demand for consumer electronics, machinery and oil products weakens across the region.

Europe Posts Biggest Trade Gap in Euro’s History