(CN) — While the Covid-19 pandemic reduced international trade in goods substantially in 2020, Europe was able to export more goods than it imported the following year. But this year, as inflation stifles global markets amid Russia's invasion of Ukraine, Europe's international trade balance has fallen into a deficit, according to data released Friday.
The data from Eurostat, the European Union statistics agency, showed similar increases in imports for both the euro area, or eurozone, and the rest of the EU between January and May 2022.
While the 19 eurozone nations saw a 28% increase in exports of goods to the rest of the world in May compared to the previous year, the area's imports increased at a higher rate of 52%.
As a result, the eurozone recorded a 26.3 billion euro ($26.5 billion) deficit in trade in goods with the rest of the world in May, compared to a 12 billion euro ($12.1 billion) surplus in May 2021.
Still, the deficit recorded in May is an improvement from the 32.4 billion euro ($32.6 billion) gap posted in April.
Despite the loss in international trade this year, the latest data showed a 33% rise in intra-eurozone trade between Belgium, Germany, Estonia, Ireland, Greece, Spain, France, Italy, Cyprus, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Austria, Portugal, Slovenia, Slovakia and Finland.
Data for the entire EU shows much of the same, with a 55% increase in international imports toppling its 28% growth in exports. After retaining a trade surplus of 8 billion euros ($8 billion) in 2021, the EU now faces a 35 billion euro ($35.3 billion) deficit.
Trade also increased by 30% between countries within the 27 EU member states.
These changes in Europe's trade market were mainly influenced by energy production. While Europe expanded exports of energy-related goods by 87%, it also imported 147% more, in particularly from Norway.
The United States continues to be Europe's largest customer, mainly for machinery and vehicle exports, with the United Kingdom close behind.
Exports to Russia were the only decrease, down 28% likely due to the ongoing war in Ukraine. However, the May data showed an 80% increase in imports to Europe from Russia, which is heavily relied on for its crude oil.
The eurozone's widest trade imbalance is with China, the dominant exporter of goods across the world.
With the largest national economy in the EU, Germany reported the highest amount of exports and imports, with similar rates of both.
As Lithuania reported a 47% rise in exports within the EU, the Baltic Sea country also showed a 90% spike in international imports as a likely result.
Notably, the island nation of Cyprus experienced dramatic developments in its international trade, with exports increasing by 102% and imports increasing by 172%.
"Eurostat uses intra-EU exports as the more reliable measure of total intra-EU trade as, at aggregated levels, total intra-EU exports has better coverage than total intra-EU imports," the report states. "Due to this divergence in intra-EU trade, and to the difficulties of interpreting figures in absolute terms at the level of individual Member States, trade balances for individual Member States must be interpreted with caution. The same caution applies to the trade balance of the euro area, which includes some intra-EU trade."
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