Low global demand has seen Germany’s exports decline at the start of the second half of the year.
German Exports Fall Following Weak Global Demand
Going by July figures, Germany’s exports fell 2.6% compared with June imports, making this the largest monthly decline since August 2015.
According to statistics from Destatis, German manufacturing showed a particularly gloomy outlook.
The economic data indicates that industrial exports did not show any significant increases in July. Meanwhile, output dropped the most in almost two years.
Historically strong trade ties with other countries have been beneficial to Germany’s economy. In spite of the global economic slowdown, the country still recorded a trade surplus of €19.4 billion.
Demand for German goods has declined the most from countries outside of Europe.
Germany, which is Europe’s biggest economy, has seen its exports to emerging economies including Russia, Japan, and China and the US fall by 13.8% compared to the same time last year.
Germany’s exports to countries in the EU but outside the Eurozone, which now include Britain fell 8.8%.
According to Carsten Brzeski, an ING economist, “The month of July was definitely a bad month for Germany.”
He added that the surprisingly poor trade performance fuelled concerns about trade.
Mr. Brzeski also noted that, “In the months ahead, a further cooling of the economy will likely offer support to the ongoing discussions on fiscal stimulus.”
Ralph Solveen of Commerzbank said that the fall in exports could be attributed to factors such as more holidays in the month of July.
He asserted though that, “Exports will certainly not drive the German economy,” further adding, “The global economy is remarkably slow but the effects of the weak euro are now fading.”
Compared with June, imports into German fell by an adjusted rate of 0.7% in the month of July.