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Economy in Brief

Italy's Trade Trends Turn
by Robert Brusca September 4, 2009

Both Italy’s exports and imports are beginning to turn their plunging growth rates higher. The Yr/Yr trend has begun to turn (see chart) for both exports and imports. The balance did swing to surplus a month ago but it still shows a reduced deficit in the current month compared to earlier months. Over three months the export rate of decline has been cut to an annual rate of about -8% compared to -18% for imports.

For exports transportation equipment, capital goods and other goods are still showing outsized Yr/Yr declines of -20% or more. Food exports and consumer goods exports are dropping at a slower pace of less than 10%.

Imports are showing Yr/Yr declines of 16% for capital goods and 44% for other goods. Transport equipment imports are declining at an 8.6% pace compared to foods and beverages with a drop of 0.7% and consumer goods imports that are advancing Yr/Yr. services imports are declining rapidly Yr/Yr as well.

The more rapid drop in imports cuts the flow of an item that diminishes growth since imports siphon off domestic demand to foreign producers. Italy’s exports in contrast have held up better and are maintaining their levels better than imports. In this way trade is helping to prop up Italian GDP.

Italy's Trade Trends
  m/mo % monthly rate Period Specified saar
Seasonally Adjusted Jun-09 May-09 Apr-09 3-MO 6-Mo 12-Mo Yr-Ago
Current Account Bal €€ (2,378) €€ 470 €€ (2,959) €€ (1,622) €€ (2,919) €€ (3,907) €€ (3,700)
  Goods Balance €€ 939 €€ 1,662 €€ 1,096 €€ 1,232 €€ 544 €€ 1 €€ 267
    Exports -2.6% -4.4% 5.1% -8.2% -30.9% -23.7% -4.4%
    Imports 0.5% -7.0% 1.7% -18.3% -36.2% -27.6% 0.4%
Services Balance €€ (788) €€ (429) €€ (1,061) €€ (759) €€ (822) €€ (814) €€ (488)
  Exports 3.6% -5.5% 0.6% -6.0% -22.9% -14.8% 5.7%
  Imports 9.3% -13.7% 0.5% -19.3% -12.2% -8.2% -1.3%
Not Seasonally Adjusted All Yr/Yr
Exports Jun-09   Jun-08   Jun-07   Jun-06
  Food&Bev -1.8%   3.9%   5.9%   10.5%
  Capital Gds -21.9%   -3.7%   15.1%   10.8%
  Transport -29.6%   2.3%   11.4%   8.4%
  Consumer Gds -9.4%   -8.8%   8.8%   7.3%
  Other Gds -32.0%   -10.2%   13.7%   17.8%
Imports Jun-09   Jun-08   Jun-07   Jun-06
  Food&Bev -0.7%   -1.9%   3.3%   7.2%
  Capital Gds -16.1%   -10.9%   7.3%   1.7%
  Transport -8.6%   -15.3%   11.0%   -0.5%
  Consumer Gds 1.3%   -3.3%   1.7%   12.7%
  Other Gds -44.9%   18.0%   0.0%   45.5%
Balances in Mlns of euros
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