Great Graphic: European Imbalances

This Great Graphic is from Bruegel, a European think tank.  It depicts the changes in the current account positions of several European countries. 

A few observations may be worth sharing.  First, despite prodigious exports and imports, there has been no significant change in the German current account position. 

Second, both Ireland and Greece have seen significant improvement, but for different reasons.  Ireland's improvement is large a function of improved exports.  Greece's improvement comes from the decline in imports, which reflects the collapse of domestic demand amid depression-like conditions. 

Third, Spain and Portugal have also seen improved exports and weaker imports.  That imports are weak should not be surprising.  As is the case in Greece, contracting economies typically see imports wane.  What stands out from Iberia is the modest strength of exports.  Italy is little changed, leaving France.  It has experienced stronger imports and exports and a slight deterioration in its current account. 
Great Graphic: European Imbalances Great Graphic:  European Imbalances Reviewed by Marc Chandler on March 12, 2013 Rating: 5
Powered by Blogger.