German exports in July unexpectedly fall as trade volatility bites
Rising shipments to US a sole bright spot but 5.7% fall in imports means trade surplus has widened
German exports unexpectedly declined in July as trade volatility took its toll, according to data released by the federal statistics office on September 8. The decline was marked by weaker shipments to European Union countries and China, highlighting the precarious nature of a trade-driven recovery in Germany's largest economy. The overall export figure fell by 0.8% compared to the previous month, contrary to economists' predictions of a 0.1% increase.
Exports to EU countries dropped by 1.6%, while those to non-EU countries saw a modest rise of 0.2%. A notable exception was the surge in exports to the United States, which jumped by 19.1% on the month after declining by 14.2% in June. Volker Treier, head of foreign trade at the German Chambers of Commerce and Industry, noted that Germany's foreign trade sector is directly impacted by trade policy volatility.
Despite strong exports boosting the German economy's growth to 0.3% in the second quarter, experts cautioned that conditions remain challenging. Dirk Jandura, president of the BGA German trade association, emphasized that the volatile figures underscore the fragile state of the economic situation, with Germany far from recovering.
Imports decreased by 5.7% on the month, leading to a trade surplus of €21.3 billion (S$31.3 billion) in July compared to €15.4 billion in June. Exporter sentiment improved significantly, with ifo survey expectations surging to the highest level since February 2022, just before Russia's invasion of Ukraine. Klaus Wohlrabe, ifo's president, remarked that the export industry is gaining momentum.
These trade figures starkly contrast with reports from France indicating a widening trade deficit in June. Moreover, Chinese exports surged by 25% year-on-year in August, driven by high-tech and AI-related products, according to new data. German companies are increasingly facing competitive pressures from Chinese rivals, as indicated by a recent DIHK survey.
German exports to China fell by 9.5% on the month, while imports from China dropped by 7.5%, as per the statistics office data.
Written by urgent.news from Straits Times Business's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
