Expensive energy has left the EU trade balance in deficit

The trade balance of the countries of the European Union (EU) at the end of 2022 was formed with a record deficit of €432 billion since the beginning of observations. In the previous ten years, the EU had a positive balance of trade in goods. The main reason for the deficit was a sharp increase in the cost of imports (plus 41% by 2021) against the backdrop of an increase in the cost of imported energy resources (their supplies in monetary terms increased by 113.6% over the year). Exports from the EU also grew, but not so tangibly – by 18%.

The excess of the growth rate of imports over exports began in June 2021. By the end of 2022, the rate of increase in imports to the EU, however, fell. (Note that the decline in energy prices also slowed down inflation – in March, according to Eurostat, it fell to 6.9% in annual terms against 8.5% a month earlier, while core inflation accelerated from 5.6% to 5. 7%.)

Germany has the highest share in EU foreign trade (28% of total exports and 20% of imports). Next in terms of share in exports are Italy (11%), the Netherlands (10%) and France (10%), in imports – the Netherlands (18%, this is due to the role of Rotterdam as the largest port), Italy (11%) and France (10%). %). The largest trading partners of the EU in exports remain the US with a share of 20%, the UK (13%) and China (9%). In terms of imports, China remains the leader (21%), followed by the US (12%) and the UK (7%).

The deficit in trade with Russia in the EU doubled over the year – from €74.5 billion to €148.4 billion. Imports from the Russian Federation increased from €163.6 billion to €203.6 billion. As a result, the share of Russian supplies in EU imports amounted to 7%, but already this year the statistics will show its sharp decline – we recall that the embargo on the import of crude oil began to operate from December last year, on the import of petroleum products – from February of this. Imports of EU countries from the Russian Federation in December compared to February 2022 have already more than halved – from €21.1 billion to €10.3 billion.

An additional tightening of sanctions control may also have a negative impact on the volume of exports of EU countries to Russia. Last year, the Russian Federation became the only major trading partner of the EU, the supply to which was reduced – from €89.2 billion to €55.2 billion. By December, compared to February, EU exports almost halved – from €8 billion to €4.3 billion , while deliveries of engineering products in the fourth quarter were higher than at the beginning of the year.

Tatyana Edovina