Trade surplus to hit record €40bn

IRELAND’s annual trade surplus is set to reach a new record high this year of over €40 billion.

The country’s annual surplus — basically the profit made from exporting more goods than are imported — reached record levels of €38.9bn last year, which itself marked a €10bn, or 35%, increase on 2008’s total. The first two months of this year have already shown a combined surplus of nearly €7bn.

Looking at export and import performance in the early part of this year has led economists to suggest 2010’s total surplus could top the €40bn mark.

“It’s quite clear, at this stage, that the export sector will be the key player in the Irish recovery story over the next few years. The trade performance last year was quite impressive by international standards, and we expect another solid performance in 2010. Indeed, we are projecting another record surplus, of over €40bn, which will help to limit the overall contraction in GDP this year,” according to Bloxham Stockbrokers economist Alan McQuaid.

Central Statistics Office (CSO) figures for the first two months of the year show seasonally adjusted exports remained stable between January and February, at just under €7bn, while the value of imports increased by 3%, to €3.52bn.

The country’s trade surplus amounted to €3.57bn in January, up from €2.6bn in December, but it fell slightly to €3.47bn in February. This figure was up from €3.64bn in February of last year.

The January figures detailed a 3% year-on-year decrease in exports to €6.73bn and a 16% year-on-year decrease in import value to €3.31bn.

Trade and Commerce Minister Billy Kelleher described the latest CSO figures as “encouraging”.

“The figures are encouraging and build on the strengthening performance of our exports since last December. Since then, there has been a steady increase in our exports, rising by 16% from just over €6bn to €6.99bn — a remarkable achievement in these difficult economic times. Our imports during that time also rose, reflecting increased activity in the economy,” he said. He added: “Net exports are a significant contributor to gross domestic product growth and our continued strong export performance is a key factor in contributing to our economic recovery.”