- Economists including Philip Shaw at Investec
The 17-nation bloc's current account surplus narrowed more than initially expected in May, as both exports and import fell, stirring further concerns surrounding the Eurozone and suggesting the strike of negative growth will be prolonged, figures from the European Central Bank showed Thursday. The seasonally adjusted current account of the bloc, that has Euro in circulation, revealed a surplus of 19.6 billion euros in May, compared with an upwardly revised surplus of 23.8 billion a month earlier, and below analysts' estimations for a 21.3 billion surplus.
Figures also showed that shipments tumbled 2.3%, while imports recorded a 2.2% slump. The data marked the second concessive month of significant drops in both exports and imports, and it was the biggest negative monthly change since June 2011. In addition to that, a trade surplus stood at 15.2 billion euros in May, a reading much stronger from last year's figure of 6.6 billion. However, the increase was a result of a 6% drop in imports, rather than a gain in exports, reflecting weak domestic demand. Weak fundamentals are raising concerns whether the European Central Bank will make another cut in its benchmark interest rate during the next month, or it will stay pat on its monetary policy.
© Dukascopy Bank SA