Green shoots in Cyprus trade deficit?

On the basis of provisional data for September the trade deficit shrank by 10.6% over the year earlier in the first nine months of the year, reaching EUR 3.25 bln in January-September, compared with EUR 3.72 bln in January-September 2011.
A shrinking trade deficit is often a sign of recession as demand for consumer goods, building materials and machinery and cars falls.
It is therefore moderately good news that the trade deficit shrank at a slightly slower pace in the third quarter (12.1%) than it did in the second (13.2%) and first (12.5%).
This may suggest that the recession has at least not deepened, although one should treat such assumptions with cautions, as these are euro-based figures and could be affected by changing exchange rates against the currencies of trading partners or by a change in oil prices.
Another ray of hope is that exports of goods have held up moderately well, rising year on year by 4.5% in the third quarter and by 2.0% in Jan-September.
The decline of imports is also moderating. Imports shrank by 8.6% in the third quarter and by 9.3% in the first nine months of the year.
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