Trade, output data point to slower eurozone growth ahead

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Trade between eurozone powerhouses Germany and France and the rest of the world produced mixed results in April, official data showed Wednesday, underscoring forecasts for moderating growth this year.

German exports and imports both fell as the world's second biggest exporter after China posted a seasonally-corrected trade surplus of 12 billion euros ($17.6 billion) --down sharply from 15.1 billion euros in March.

France, the second-biggest eurozone economy, saw a record deficit of 7.14 billion euros in April, much worse than the March shortfall of 5.91 billion euros.

French exports declined by 2.0 percent while imports gained 3.6 percent, mainly owing to the purchase of two big Boeing aircraft from the United States and a jump in purchases of refined oil products.

"The weakening in cyclical, especially production, indicators has been visible across developed and emerging market economies," Barclays Capital analysts said in a research note.

That was highlighted by German economy ministry data which showed that industrial output fell 0.6 percent in April, the first fall since December, following a revised gain of 1.2 percent in March.

After enjoying a very strong first quarter, the German economy, Europe's biggest, is forecast to slow a bit in coming months but still post a strong annual growth rate of around 3.0 percent, according to private economists.

Falling unemployment should boost domestic consumption, a pillar of growth that has been less reliable than exports in the past.

"Today's numbers show that the period of a roaring German growth engine might be over. However, the engine is not stuttering, it is rather purring," ING senior economist Carsten Brzeski said.

For Capital Economics chief European economist Johathan Loynes, however, the German data meant that "growth in the currency union and its biggest economy is likely to slow quite sharply in the second quarter."

Berenberg Bank counterpart Christian Schulz noted that "disruptions from the Great Japan earthquake in March probably caused much of the decline" in German industrial output.

"This was similar in other countries such as the United States, where industrial production was flat in April. Japanese companies are crucial suppliers of car parts and semiconductors worldwide," Schulz noted.

Elsewhere in Europe, Greek industrial output in April plunged 11 percent from the same month a year earlier, following an 8.0 percent fall in March.

Greek statistics agency Esa said the downturn reflected falls in key sectors -- mining, manufacturing, electricity and water supply production.

Balkan neighbours Bulgaria and Romania turned in positive first quarter growth rates meanwhile, posting increases of 0.6 percent and 0.7 percent respectively.

Growth was driven by exports in Bulgaria, and by industrial output in general in Romania, the data showed.

© 2011 AFP

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