The euro area exported 123 billion euros ($162.7 billion) of goods and services, compared with 129.1 billion euros in October, the European Union’s statistics office in Luxembourg said today, citing seasonally adjusted data. That 4.7 percent drop was the biggest since June 2000. The trade deficit widened for the first time in four months to 4.9 billion euros as imports fell 2.5 percent.
The collapse of foreign demand helped persuade the European Central Bank to reduce interest rates yesterday after earlier signaling it was more likely to leave borrowing costs unchanged. The central bank will have to cut its forecast for a 0.5 percent contraction in the euro-area economy this year at its March meeting, ECB President Jean-Claude Trichet said.
The economy of Germany, the world’s largest exporter, may have contracted as much as 2 percent in the fourth quarter as the credit crisis hurt shipments abroad, the Federal Statistics Office said this week. That would be the biggest slump in more than two decades.
German manufacturers are suffering as the global financial turmoil sucks in the economies of eastern Europe. MAN AG, the Munich-based truckmaker that generates almost three-quarters of its sales through exports, saw orders decline last year, Chief Executive Officer Hakan Samuelsson told investors this week.
The euro region’s energy trade deficit jumped to 260.5 billion euros in the first 10 months of 2008, compared with 185.5 billion euros in the year-earlier period. The overall deficit with Russia, the world’s second-biggest oil producer, reached 32.8 billion euros in the January-October period, after 24.5 billion euros as imports surged 24 percent. Imports from China rose 7 percent to 151.6 billion euros.
Renault SA, France’s second-biggest carmaker, reported a 29 percent drop in December sales, while Louis Gallois, chief executive officer of Airbus SAS’s parent company European Aeronautic, Defence & Space, said Europe’s biggest planemaker will miss its target to deliver 21 A380 planes this year.
Unemployment in the single-currency area rose in November to 7.8 percent, the most in almost two years, while confidence among manufacturers plunged to the lowest on record in December. The series dates back to 1985.