Euro-Zone Exports Boost Growth Hopes - Wall Street Journal

By ILONA BILLINGTON

LONDONâ€"A fourth consecutive increase in euro-zone exports took the region's trade balance into surplus in February, data showed Monday, bolstering hopes that economic contraction will be short lived.

The 17-nation currency bloc had a combined trade surplus of €2.8 billion ($3.66 billion) in February, compared with a €7.9 billion deficit in January and a €2.8 billion deficit in February 2011, the European Union's statistics agency said.

Exports for the region, in seasonally adjusted terms, grew 2.4% in February from January, a fourth straight monthly increase that economists say could be key to stopping a spiral into a deep recession so soon after one in 2008-09.

The euro zone is widely expected to have re-entered recession, defined as two consecutive quarters of economic contraction, over the first three months of 2012.

"The fourth successive rise in euro-zone exports in February boosts hopes that improving foreign demand will play a significant role in helping the single currency area return to growth over the coming months," said Howard Archer, chief euro zone and U.K. economist for IHS Global Insight. "It still seems highly likely that weak domestic demand in many countries meant that the single currency area suffered further gross domestic product contraction in the first quarter, thereby moving into recession."

The data were broadly in line with economists' forecast for a €3 billion trade surplus. Eurostat previously estimated the January deficit at €7.6 billion.

Unadjusted data show that exports totaled €150 billion in February, up from €134.9 billion in January, while imports were worth €147.2 billion in February compared with January's €137.7 billion.

Details of the February dataâ€"calculated according to Eurostat's seasonal-adjustment model and not a new statistical method created by the World Trade Organization and the Organization for Economic Cooperation and Developmentâ€"show Germany exported more than double its closest competitor France.

In February German exports totaled €39 billion, a 1.4% increase from January. While French and Italian export growth was stronger at 1.6% and 4.8% respectively, the totals were €15.7 billion and €14.7 billion.

Write to Ilona Billington at ilona.billington@dowjones.com