Do energy imports contribute to Eurozone’s shrinking trade deficit?

In May 2022, the Eurozone had a substantially larger trade deficit than it did in May 2022 because countries paid less for energy imports.

According to the European Union’s statistics office Eurostat, the trade deficit for the union in May was about 300 million euros ($336.8 million), significantly lower than the EUR30.3 billion deficit shown in the same month a year earlier.

The data showed that while exports were barely down, imports were down 13% from May 2022. Due to the diminished impact of energy imports, almost all Eurozone member states had significantly lower imports, according to Eurostat.

After the trade gap widened to record levels last year as a result of Russia’s invasion of Ukraine, which made European countries pay exorbitant prices for imported energy, the imbalance has shrunk. The trade deficit for the Eurozone reached a record high in 2022, however it has since decreased or turned to surpluses for each month of 2023.

When seasonal fluctuations are taken into account, exports increased by 2.9% while imports slightly decreased from the previous month. In contrast to the EUR8 billion deficit in April, this led to an adjusted deficit of EUR900 million.