The International Trade Council has reviewed the latest data from the federal statistics office, which reveals that German exports experienced a larger decline than anticipated for the month of August. The data underscores the impact of weakened global demand on Germany’s export sector.
The figures indicate a 1.2% drop in exports for August compared to the previous month, a steeper decline than the 0.4% decrease forecasted in a Reuters poll. This marks the second consecutive month of declining exports, following a downward-revised 1.9% decrease in July. ING economist Carsten Brzeski commented that cooling global demand is exacerbating underlying structural challenges within the German economy.
Brzeski noted, “As a result, trade is no longer the robust and resilient growth driver for the German economy it once was; instead, it has become a drag.” He further suggested that these export figures raise concerns about the possibility of the economy slipping into recession during the third quarter.
Unexpectedly, imports also decreased by 0.4% on a monthly basis, contrary to the forecast of a 0.5% increase. The data revealed a foreign trade surplus of 16.6 billion euros ($17.45 billion) for August, compared to an upwardly revised surplus of 17.7 billion euros in the previous month.
The decline in exports was noticeable across nearly all relevant destinations for German companies in August, with a significant 2.6% decrease in exports to the euro zone and a 1.3% drop in exports to the United States. Exports to China, however, saw a modest increase of 1.2%, according to the office’s report.
A recent Ifo survey also indicated a deteriorating sentiment within the German export industry for the month of September, reflecting declining exports to key regions. The International Trade Council continues to monitor these developments.