The euro zone's trade surplus in the first six months of 2005 shrank to less than half the figure for the same period a year before as oil prices pushed up sharply the cost of energy imports.

The trade data released by Eurostat, the European Union's statistical unit, highlighted the impact of higher oil prices on the world economy, threatening economic growth.

But economists said that the generally strong import growth, while exports remained firm, might also be a sign of a pick-up in domestic demand, possibly heralding an improvement in the euro-zone economic outlook.

Strong growth in imports "could be seen as a positive sign if they are used as inputs for production or consumed. The US consumes a lot and imports a lot, which is not seen as a weakness in the US", said Dirk Schumacher, economist at Goldman Sachs in Frankfurt.

The €17.3 billion trade surplus in the six months to June compared with a €41.1 billion surplus in the first half of 2004 and was the smallest first-half surplus reported for the euro zone since 2001.

Imports in the first half of 2005 were 10 per cent higher than a year before, while exports were up 5 per cent.

Detailed results for the first five months of the year showed energy imports were up 41 per cent. But there were significant rises in other areas: machinery and vehicle imports were up by 4 per cent, "other manufactured articles" rose 10 per cent and chemical imports by 12 per cent.

The European Central Bank hopes for an improvement in euro-zone economic activity in the second half of the year. But fears about the French economy heightened yesterday after figures showing domestic demand contracted significantly in the second quarter.

French private consumption fell by 0.3 per cent compared with the previous three months, after a 0.8 per cent rise in the first quarter.

In Germany, business confidence surveys have shown prospects appearing to brighten. But in a research note, Munich-based HVB bank argued that euro-zone businesses and consumers were "still exercising great restraint when it comes to investment, employment and consumption . . .Therefore the looming upswing will be a moderate and short-lived one."