The eurozone’s trade surplus with the rest of the world narrowed for the third straight month in July, another warning sign that economic growth may be easing further after a second-quarter slowdown.
The European Union’s statistics agency on Thursday said that on a seasonally adjusted basis, exports of goods from the currency area fell by 1.1% from June, while imports rose by 1.4%, leading to a decline in the trade surplus to ?20 billion ($22.5 billion) from ?23.8 billion in June. Without the seasonal adjustment, the surplus fell to ?25.3 billion from ?31.1 billion a year earlier.
A widening of the surplus was the main driver of economic growth for the eurozone during the three months to June, as spending by households and businesses slowed. Overall, economic growth edged down to 0.3% from 0.5% in the first quarter.
The narrowing surplus in July is consistent with other indications that growth may have eased again in the third quarter, and follows figures released Wednesday that recorded a large fall in industrial output during the month.
Economists at the European Central Bank last week lowered their growth forecast for next year to 1.6% from 1.7% in June, seeing only a modest impact from the U.K.’s June vote to leave the EU. But ECB President Mario Draghi warned that Brexit and other developments threaten to weaken growth.
“The economic recovery in the euro area is expected to be dampened by still subdued foreign demand, partly related to the uncertainties following the UK referendum outcome,” he said.
The modest nature of the eurozone’s economic recovery since mid-2013 has been a hindrance to Mr. Draghi’s efforts to meet the ECB’s inflation target, which stands at just under 2%.
Eurostat Thursday also confirmed figures that showed consumer prices were just 0.2% higher in August than a year earlier, leaving the central bank no closer to its goal than when it launched the first of a series of stimulus packages in June 2014.