(BRUSSELS) - The eurozone trade surplus with the rest of the suffered a sharp contraction in April compared to March, falling to 1.8 billion euros (2.4 billion dollars) from 7.6 billion, official EU data showed Friday.

But the April figure, reported by the European Union's Eurostat data agency, extended an overall improvement from last year. In April 2006 the eurozone showed a deficit of 2.7 billion euros.

The eurozone's trade balance remained in surplus in April as exports grew faster than imports even though the euro hit new highs against the dollar in the month, peaking on April 27 at 1.3682 dollars, making the bloc's goods more expensive abroad.

Global Insight's Howard Archer said that April data was "pretty reassuring overall," with exports showing ongoing resilience in the face of the strong euro.

Despite the euro's lifetime high "this did not stop Eurozone exports rising by a seasonally-adjusted 0.6 percent month-on-month," he said.

"Even allowing for higher oil prices pushing up import values, this indicates that Eurozone domestic demand remains healthy."

The ongoing resilience of eurozone exports is likely to reinforce the European Central Bank's belief that regional growth is strong enough to warrant a further hike in interest rates in September, "particularly given the bank's concerns over medium-term inflation risks," Archer added.

Exports rose 12 percent in April over 12 months to 119.5 billion euros while imports expanded eight percent over the period to 117.7 billion euros.

Those figures helped this year's trade tallies into positive territory, with an overall surplus over the first four months of the year of 1.4 billion dollars.

Meanwhile, the 27-nation EU trade balance as a whole remained in deficit in April, with imports overshooting exports by 14.4 billion euros.

While worse than March's 10.5 billion euro deficit the figure was nevertheless and improvement on the corresponding figure last year of a 16.5-billion-euro deficit.

EU 27 exports fell by 1.7 percent compared to March wile imports nudged up by 0.1 percent.

Further details - Eurostat

Text and Picture Copyright 2007 AFP. All other Copyright 2007 EUbusiness Ltd. All rights reserved. This material is intended solely for personal use. Any other reproduction, publication or redistribution of this material without the written agreement of the copyright owner is strictly forbidden and any breach of copyright will be considered actionable.