Non-EU trade deficit narrows as exports gather pace
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Your support makes all the difference.BRITAIN'S trade deficit with countries outside the European Union narrowed last month as the value of exports grew twice as quickly as imports, writes Robert Chote.
December's non-EU trade gap was pounds 675m, compared with pounds 773m in the previous month, according to the Central Statistical Office. Imports grew 5 per cent in the month to pounds 5.7bn while exports rose 2.5 per cent to pounds 5bn.
The non-EU trade deficit was volatile throughout last year, but has been shrinking slowly on a trend basis. 'Exporters are clearly benefiting from both a more competitive exchange rate and recovery in demand outside the EU; and the sharp pick-up in export optimism reported in the January CBI survey suggests they are confident it will continue', said Adrian Cooper, economist at James Capel.
Excluding oil and erratic items such as ships, aircraft and precious stones, the narrowing in the trade gap was more dramatic. The underlying deficit on this definition fell from pounds 689m in November to pounds 450m in December, with imports showing a barely discernible increase.
The non-EU trade gap for 1993 as a whole was pounds 9.5bn, slightly lower than the pounds 9.7bn recorded in the previous year. The deficit in trade with other countries in the EU totalled pounds 1.3bn in the first 10 months of the year, with these figures being released late as they are now calculated from VAT returns rather than customs declarations.
December's rise in the value of exports reflected a rise in the number of goods sold abroad and their price. Import volumes are still growing at a higher trend rate than export volumes.
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