The persisting weakness of Eurozone's external sector provides further evidence that the economic growth will remain sluggish in the near term, Paul Hollingsworth, Assistant Economist at Capital Economics, said.

According to the economist, the latest merchandise trade data signal that the external sector remains too weak to single-handedly power an economic recovery. Weak global demand and a strong euro indicate that growth will remain rather more subdued than the recent economic surveys suggest.

Data released by the Eurostat yesterday showed that Eurozone's seasonally-adjusted trade surplus widened to EUR14.5 billion in October from EUR12.4 billion in September, which is high by historical standards.

However, the improvement was driven primarily by a 1.2 percent monthly fall in imports, rather than by the modest 0.2 percent rise in exports.

Among the major member countries, Germany's trade surplus narrowed slightly as exports rose by 0.2 percent but imports grew by 2.9 percent. Also, the improvement in France's and Italy's trade positions reflected weaker imports rather than stronger exports.

Meanwhile, the export orders sub-index of the purchasing managers' index (PMI) for November, compiled by Markit Economics, showed that new orders remain consistent with quite a sharp pick-up in export growth over the coming months.

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