The Euro zone’s trade surplus for June hit its highest level since records began, reaching €14.9billion (£11.7billion), completely contradicting the latest GDP figures.
The surplus has caused confusion amongst economists as many had been predicting the doom of the Euro and criticising austerity measures. The news of a surplus completely contradicts the Eurozone’s latest GDP figures showing that the Eurozone will be unable to avoid entering recession in the third quarter of the year.
It appears that no-one actually has the slightest clue as to how well or bad the world’s economy is doing. Economists have clashed with the UK’s office of national statistics over their data releases as business people and analysts see signs that the UK is growing and on the right course for recovery. Then the ONS release data that completely contradicts the trends seen in various sectors.
The surplus data was released by Eurostat which said that Germany, Ireland and the Netherlands recorded the biggest surplus amongst the 17 members of the Eurozone. When news outlets, governments and independent organisations constantly post data that contradict each other it makes it clear that no-one actually has the foggiest.
Apparently the surplus was caused by increased exports to Asia and emerging markets including Russia, Japan, Brazil and South Korea.
“Companies have to look for foreign buyers to replace austerity-hit domestic demand and wage restraint and leaner production improve competitiveness,” said Berenberg Bank analyst Christian Schulz.
“Germany is still playing a big part. Although it has recently started losing competitiveness with its Eurozone partners, the German economy continues to enjoy a high and still improving level of competitiveness at the global level,” he added.
According to the data the EU’s trade surplus was 400m Euros, compared with a 15.3bn-euro deficit a year earlier. How can that be when all the data prior to today showed that the Eurozone is decline?
“The Eurozone is on the right track,” said Schulz.”Structural reforms improve competitiveness and austerity reduces imbalances. If this process continues — and Germany and the ECB are doing their best to ensure that — the Eurozone can emerge from this crisis as a much more dynamic and competitive economy.”
Could it really be that an end to the Euro crisis is sight on the horizon? Exports from Spain rose 1%, Italy 4%, 9% from Portugal and 17% for Greece.
Not all were as enthusiastic. London-based Capital Economics instead focused primarily on growth indications as the Eurozone readies for what could be a prolonged recession.
“With global growth slowing, we don’t expect the resilience of the core’s exports to last much longer,” its economists said in a note.
Given a subdued outlook for domestic demand, it underlined: “We still see both Germany and France slipping into recession in 2013.”
With all the contradictory data and opposing opinions out there it is impossible to say whether things have improved or not, until the worlds analysts and economists come to a mutual consensus on the state of the global economy the picture is going to continue to be muddied.
The Pound to Euro exchange rate is currently trading at 1.274
The Pound to US Dollar exchange rate is currently trading at 1.567
The Pound to Australian Dollar exchange rate is currently trading at 1.504
The Euro to US Dollar exchange rate is currently trading at 1.230
The Euro to Pound exchange rate is currently trading at 0.784
Comments are closed.