German Exports Post Biggest Drop in Almost Seven Years

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The FINANCIAL — Germany’s trade surplus missed forecasts in August, as exports registered their steepest decline in almost seven years, official data showed on October 8, according to Nasdaq.

Separately, the country’s leading economic think tanks lowered their 2015 growth forecast for Europe’s largest economy. Exports will be held back by a weaker global economy and emerging markets slowdowns, they said, while the stimulus from a lower euro exchange rate is fading, too. A weaker euro makes German goods more competitive outside the eurozone.

This is the latest in a string of disappointing economic news, raising a question mark over the robustness of Germany’s economic upswing. The economics ministry earlier this week revealed steep falls in both manufacturing orders and industrial production in August.

“The German economy is seeing a moderate economic upswing” that is being primarily driven by private consumption, the country’s leading think tanks said in a joint report.

Economic growth should be steady at 1.8% next year, the Munich-based IFO institute, the Essen-based RWI, the DIW in Berlin and the IWH in Halle said. The revision to 2015 growth came on the back of a surprisingly weak first quarter.

German exports slumped by 5.2% in August from the preceding month, pushing down the adjusted trade surplus to €19.6 billion ($22 billion), the Federal Statistical office said. The trade surplus in July was revised down to €22.4 billion.

That was the steepest decline in German exports since January 2009, an economist at Destatis said. The data, however, should be treated skeptically, as the economic method of seasonal adjustment may not fully capture the summer vacation effect, the economist said.

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It can probably be assumed that weak foreign trade reflects “developments in emerging markets, given that Germany’s two main developed market trade partners, the U.S. and the U.K., are growing at a solid pace,” said Dominic Bryant, an economist at BNP Paribas in London.


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