The eurozone trade balance with the rest of the world widened at the end of the year as strong global growth spurred demand for European exports, although a stronger euro could hamper trade.
Externally, the eurozone surplus in December increased to 23.8 billion euros from 22 billion euros in the previous month, as exports grew almost twice as fast as the pace of imports.
Exports increased 1.7% compared with a 0.9% increase in imports. This was due to a more than 15% monthly increase in France's exports, which more than offset a slight drop in exports of goods from the first and third largest economies in the eurozone – Germany and Italy.
Klaus Vistesen of Pantheon Macroeconomics said data show that Eurozone trade was “stable,” but trade balance will be weakened in Q1 2018 due to a stronger euro.
Although the expert suggested that rising US budget spending and a larger United States trade deficit could limit the impact of a stronger currency.
Over the past 12 months, the euro has risen 15% against the dollar, making European goods more expensive for US customers.
On an annualized basis, the surplus fell slightly in December compared with the previous year, as export growth lagged behind growth in imported goods.
According to Eurostat, a surplus of 25.4 billion euros was recorded in the single currency zone, compared with 27.6 billion euros in December 2016.
Although exports increased by 1% compared to the same period last year and amounted to 180.7 billion euros, imports from the rest of the world grew by 2.5%, slightly narrowing this gap.
Meanwhile, in the eurozone, trade between block members increased by 2.8% compared with the previous year and amounted to 142.4 billion euros.