German Trade Surplus Declines More Than ExpectedSeptember 11, 2023
Germany’s trade surplus declined more than expected in July on weak exports and rising imports, exacerbating the possibility of economic contraction in the third quarter.
Exports posted a monthly decline of 0.9 percent in July, in contrast to June’s 0.2 percent increase, Destatis reported Monday.
Nonetheless, the pace of decline was not as severe as economists’ forecast of 1.5 percent decrease.
On the other hand, imports grew 1.4 percent, reversing a 3.2 percent drop in June. The pace of growth also exceeded expectations of 0.5 percent rise.
As a result, the trade surplus declined more-than-expected to a seasonally adjusted EUR 15.9 billion from EUR 18.7 billion in June. The expected level was EUR 18 billion.
On a yearly basis, exports were down 0.9 percent, reversing last month’s 1.7 percent increase. At the same time, the annual fall in imports deepened to 10.3 percent from 9.3 percent.
With last week’s drop in retail sales and today’s disappointing export data, the third quarter for the German economy has started on a very weak footing, suggesting that the risk of sliding back into contraction remains high, ING economist Carsten Brzeski said.
Exports of goods to the United States grew 5.2 percent on month and that to China increased 1.2 percent. By contrast, shipments to the United Kingdom dropped 3.5 percent.
Data showed that imports from China decreased 5.8 percent, while that from the US grew 6.1 percent. Imports from the UK were down 3.2 percent.
Goods exported to euro area countries climbed 1.7 percent in July and goods imported from these countries gained 5.6 percent.
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