Net trade probably contributed little to euro-zone GDP growth in Q1, but the outlook for exports is encouraging. The monthly goods export and import values data show a decline in the goods trade surplus from €65.3bn in Q4 to €57.3bn in Q1. Admittedly, these data are not a perfect guide to the quarterly goods and services trade volumes data used to construct GDP. But while the German GDP breakdown showed that net trade made a strong positive contribution to growth, net trade was a heavy drag on French economic activity. In any case, we think that export growth will pick up over the rest of the year. After all, global growth is fairly strong, and the recent increase in the export orders index of the euro-zone manufacturing PMI points to a sharp pick-up in export growth to come.
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