The 15-nation euro region had a seasonally adjusted deficit of 6.4 billion euros ($9.1 billion), compared with a 3.5 billion-euro trade gap in June, the European Union's statistics office in Luxembourg said today. The July deficit is the largest since the euro was introduced in 1999.
Euro-area exports to the U.S., the second-biggest buyer of the region's goods, have fallen the most since 2003 this year as economic expansion there has eased. At the same time, record oil prices pushed up spending on imported fuels such as gasoline and heating oil by 41 percent, further widening the trade gap
Crude oil reached a record $147.27 a barrel on July 11 and the euro region's energy imports soared 41 percent to 151 billion euros in the first half, according to today's report. The detailed data are published with a one-month lag.
The soaring energy costs boosted imports from Russia, which supplies 34 percent of Europe's imported oil and 40 percent of its imported gas. Overall imports from Russia, home of OAO Gazprom, the world's biggest gas producer, soared 22 percent in the first half and the euro area's trade gap with the nation soared 25 percent to 20.4 billion euros, today's report showed.
The detailed data for the January-June period also showed exports to the U.S., the world's largest economy, fell 4 percent from a year earlier. That is the biggest first-half decline since a 9 percent drop in 2003. Shipments to the U.K., the euro area's biggest trading partner, rose 1 percent.
The euro reached a record above $1.60 to the dollar in July, taking its gain over the previous 12 months to 15 percent. The euro's strength undermines the competitiveness of European goods sold abroad.
A slowdown in overseas sales has curbed production at Europe's factories and dragged the region's economy into its first contraction in almost a decade in the second quarter. Manufacturing activity has contracted for the last three months, according to a monthly survey of purchasing managers, while export orders have fallen for five months.
Europe's trade deficit with China, which last year overtook the U.K. to become the euro area's biggest supplier, narrowed by 1.2 percent to 49.9 billion euros in the six months through June. Exports to Asia's second biggest economy rose 15 percent.