BERLIN (Reuters) – German exports fell by a smaller-than-expected 0.9 percent in July from a month earlier, as global demand continues to falter, data from the Federal Statistics Office showed on Monday.
This result comes compared to expectations of a decline of 1.5 percent in a poll conducted by Reuters.
“Trade is no longer the strong driver of resilient growth for the German economy, but rather a drag,” said Carsten Brzeski, global head of macroeconomics at ING.
Friction in the supply chain, a more fragmented global economy and China’s increasingly ability to produce goods it previously bought from Germany all weighed on exports in June, Brzeski said.
The data showed that imports rose 1.4 percent on a monthly basis.
The foreign trade balance showed a surplus of 15.9 billion euros ($17.15 billion) in July, compared to 18.7 billion euros in the previous month.
With retail sales falling in July and disappointing export data in July, the German economy’s third quarter started on a very weak footing, suggesting that the risk of slipping back into deflation remains high, Brzeski said.
The office said that exports to European Union countries increased by 0.5% compared to the previous month, while exports to countries outside the European Union decreased by 2.5%.
“It is not only the global weakness in demand that is causing more and more problems for companies,” said economist Bastian Heberle from Hauke Aufhauser Lampe Privatbank. “They are also suffering from the erosion of their competitiveness in global sales markets.”
A survey conducted by the Ifo Institute in August showed that German export expectations had deteriorated slightly due to weak foreign demand.
“As long as the global economic environment remains weak, German exports will also remain low,” said Thomas Getzel, chief economist at VP Bank.
($1 = 0.9273 euros)
Reposted by Maria Martinez; Writing by Friedrich Heine. Edited by Alex Richardson and Christopher Cushing
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