The trade surplus narrowed sharply in July as the global slowdown caused exports to put in their worst performance of the year.

The Central Statistics Office said seasonally adjusted exports were €7 billion for the month, compared to €7.9 billion in June, while imports rose to €3.9 billion, compared with €3.8 billion a month earlier.

That gave rise to a €3.2 billion surplus for July, compared with €4.2 billion in June.

On an unadjusted basis, the value of exports in July was 10 per cent lower year on year at €7.1 billion, while  imports were relatively unchanged at €3.6 billion. The exports decline was attributed to a fall in the chemicals sector.

"While trade figures are very volatile and not too much should be read into one months data, the export figures released today do reflect the weakness in Ireland's export markets," NIB chief economist Dr Ronnie O'Toole said.

"Growth in Ireland's most important export market - the eurozone - was disappointingly weak in quarter two, with GDP increasing by just 0.2 per cent. "

Over the first six months of the year, exports rose by 7 per cent compared to the same period in 2010, increasing to €47.1 billion. This was fuelled by a 14 per cent rise in the value of exports in the medical and pharmaceutical sector, a 13 per cent rise in organic chemicals, and an 81 per cent rise in petroleum

It was offset by a decline in the exports of computer equipment, which was down 7 per cent, and |telecoms and sound equipment, which was 25 per cent lower.

Over the six-month period, exports to the USA increased by 14 per cent, but goods to Spain fell by 16 per cent.

The US remained Ireland's largest single export market, followed by Belgium and Britain.

Imports were 9 per cent higher at €25 billion, with petroleum imports 24 per cent higher,  and medical and pharmaceutical products rising by 24 per cent.

More than half of imports to the economy were from Great Britain, the USA and Germany.