GDANSK/BERLIN – German exports unexpectedly fell in July, as weaker shipments to European Union countries and China underscored the fragility of a trade-led recovery in Europe’s largest economy.
Exports fell by 0.8 per cent in July compared with the previous month, data from the federal statistics office showed on Sept 8. Economists polled by Reuters had expected a 0.1 per cent increase.
Exports to EU countries dropped by 1.6 per cent, while those to non-EU countries increased by 0.2 per cent on the month. Exports to the United States jumped 19.1 per cent on the month after falling 14.2 per cent in June.
“Germany’s foreign trade sector is feeling the volatility in trade policy directly,” said Volker Treier, head of foreign trade at the German Chambers of Commerce and Industry (DIHK).
Stronger exports helped the German economy grow by 0.3 per cent in the second quarter but economists warned that conditions remain challenging.
“The volatile figures show how fragile the economic situation remains. Germany is still a long way from being out of the woods,” said Dirk Jandura, president of the BGA German trade association.
Imports dropped by 5.7 per cent on the month, meaning Germany’s trade surplus with the rest of the world grew to €21.3 billion (S$31.3 billion) in July from €15.4 billion in June.
Sentiment among exporters has improved considerably, with an ifo survey of expectations rising in August to the highest level since February 2022, shortly before Russia’s invasion of Ukraine.
“The export industry is picking up speed,” said ifo’s Klaus Wohlrabe.
Sharp contrast with Chinese export figures
The trade numbers – and separate data from France showing a widening French trade deficit in June – were in sharp contrast to new figures showing a 25 per cent surge in Chinese exports year-on-year in August on the back of high-tech and AI-related products.
German companies are increasingly feeling competitive pressure from Chinese rivals, a DIHK survey showed last week.
German exports to China fell by 9.5 per cent on the month, while imports from China dropped by 7.5 per cent, statistics office data showed. REUTERS
