The trade deficit in the UK shrank in March as exports to the US, China and Russia grew strongly, official figures have shown.
The UK's trade deficit on goods and services was £2.7 billion in March, compared to £2.9 billion in February, while the deficit on goods alone was flat at £8.6 billion.
Exports to countries outside the European Union (EU) grew by 12%, driven by chemicals and cars, while the eurozone crisis continued to take its toll as EU exports were flat month on month.
While the deficit shrank slightly, economists said net trade was still likely to have knocked 0.2% off gross domestic product (GDP) growth, putting a dampener on hopes that growth figures for the first quarter of the year will be revised upwards.
Vicky Redwood, chief UK economist at Capital Economics, said: "March's UK trade figures showed a bit of an improvement, although the external sector still looks likely to have dragged on GDP growth in the first quarter overall."
The UK economy shrank 0.2% in the first three months of the year, following a 0.3% decline in GDP in the final quarter of 2011, meaning the country entered a technical recession.
Chancellor George Osborne is relying on a shift in the economy towards the private sector, particularly in manufacturing and exports, to withstand his far-reaching package of public sector spending cuts.
The deficit in trade in goods with the EU, the UK's biggest trade partner, widened by £700 million to £4.5 billion in March, as exports were unchanged at £13.2 billion and imports rose 4% to £17.6 billion. The deficit on trade in goods with non-EU countries narrowed by £0.8 billion to £4.1 billion in March, as exports rose 12% to £13.2 billion and imports rose 4% to £17.3 billion.
David Kern, chief economist at the British Chambers of Commerce (BCC), said the eurozone crisis and stronger pound will put pressure on exporters.
He said: "The Government must take action to address the issues faced by our exporters. British companies, particularly small and medium-sized firms, have huge untapped potential to increase exports. Giving them extra support will help them compete on equitable terms, and will benefit the national economy as a whole."
The Press Association, photo UK in Spain