The merchandise trade deficit expanded by 70.9% y/y to EUR211m in July with imports rebounding somewhat to 4.5% y/y growth from the 8.3% y/y decline in June while exports remained in negative territory, albeit easing the decline to 2.3% y/y, the stat office reported on Tuesday. Exports growth was mostly affected by a sharp decline in exports to non-EU countries, down by 19% y/y, which was partly compensated by the 7% y/y growth of exports to EU countries, most notably to Latvia, Lithuania and Denmark. On the import side, non-EU imports were flat y/y while EU imports rose by 6% y/y in July with a notable growth of imports from Finland, Russia and Sweden.
In Jan-Jul, the trade deficit fell by 11.6% y/y to EUR946.5m representing 3.5% of GDP with exports growth (3.6% y/y) surpassing growth of imports (1.8% y/y). Growth of exports was observed all across the board with the exception of mineral products where the value of exports was affected by falling international prices. As of imports, a similar trend was observed while wood and machinery imports also registered a slight decline y/y/
All in all, exports growth will continue to deteriorate on the back of lower demand in trading partners while imports should also be affected by the lower investment demand as well as precautionary private consumption given the uncertainty ahead.