EU Imports Keep Growing
The EU import trend suggests that we are far from a recession
Published by Luigi Bidoia. .Europe Conjuncture Foreign markets Global economic trends
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In the last few days the EU Quarterly International Trade datamart has been updated, including a pre-estimate1 of Q2-2019 trade data. This recent release allows to analyse the comprehensive performance of EU imports in the first half of 2019.
Contrary to some concerns, in recent months EU imports recorded a year-over-year growth rate of over 4% (see the chart below). While representing a significant slowdown compared to the near-6% growth rate of the 2017-2018 average, this dynamic does not support the hypothesis of a short-term recession scenario in Europe.
Even if EU imports as a whole have been growing in recent months, not all EU countries are enjoying the same level of health. In order to highlight the role played by the different EU countries in this cyclical phase of foreign trade, in the map below we have positioned the countries on the basis of two factors:
- 2018 growth rate of imports (y-o-y)
- H1-2019 growth rate of imports (y-o-y)
The map allows to distinguish countries that have suffered a significant slowdown in terms of demand from those that are still experiencing a sustained growth or are even accelerating.
In the bottom right area of the map we can find countries whose imports have been slowing down. This area includes some significant countries in terms of imports level, such as Italy, Belgium and Spain, as well as some other countries with a smaller imports volume (e.g. Sweden, Denmark and Finland). Ireland and Cyprus suffered the strongest slowdown in terms of imports growth, going from two-digit growth rates in 2018 to a fall in the first half of this year.
In the opposite area of the map (top left), we can find countries whose imports growth has been accelerating in recent months. Among these countries, France and United Kingdom are the most relevant cases, with an import growth rate close to 6% in the first half of the year.
The "crisis area"(bottom left) is empty, confirming that in the last 12 months no EU country has experienced strong difficulties.
Conversely, the "development area" (top right) is crowded. In these area there are many countries that have registered growth rates of imports of over 6% both in 2018 and in the first half of 2019. Among these, Netherlands and Poland stand out, as well as many emerging EU countries: Croatia and Slovenia, the Baltic Republics (with Estonia a little behind) and central Europe countries (Hungary, Slovakia and Romania). The performance of Greece, which is still recovering after the difficulties of the first half of this decade, is noteworthy, as well as the one of Portugal.
Germany is at the center of the map, signaling that the modest imports growth shown in 2018 is going on in 2019.
Data on EU imports in H1-2019 show that the European economy is certainly slowing down compared to the strong growth shown in 2017 and in the first part of 2018; nonetheless, it is far from the feared recession scenario.
1. The data currently available on imports declared by EU countries end in May 2019 for extra-EU trade flows and end in April for intra-EU trade flows. In order to have complete information about the first half of 2019, nowcasting models were used. As the forecast horizon is only one or two months, these models have good forecasting ability.