Germany’s exports fall more than expected

Germany’s exports fell 3.6 percent on a monthly basis in May due to the decline in Chinese imports.

Germany’s Federal Statistical Office (Destatis) announced the country’s foreign trade data for May.

Accordingly, seasonally and calendar adjusted exports in the country decreased by 3.6 percent in May compared to the previous month and amounted to 131.6 billion euros.

It was noteworthy that exports fell above expectations in May after a 1.7 percent increase in April. Market expectations were that exports would fall by 1.9 percent in May.

Imports decreased by 6.6 percent to 106.7 billion euros in May.

Thus, Germany’s seasonally and calendar adjusted foreign trade surplus amounted to 24.9 billion euros in May. In April, the country’s foreign trade surplus was 22.2 billion euros. In May 2023, the surplus was recorded as 16.8 billion euros.

Compared to May 2023, exports decreased by 1.6 percent and imports by 8.7 percent. The decline in exports was mainly due to weak Chinese trade.

In Germany, 72.3 billion euros of May exports were made to European Union (EU) countries. 55.7 billion euros of the country’s imports were also realized from EU countries.

Compared to April, exports to EU countries fell by 2.5 percent, while imports from these countries fell by 8.9 percent.

According to Destatis data, Germany’s exports to China, its most important trading partner, fell by 10.2 percent in May compared to April to 7.6 billion euros.

In the said period, Germany’s exports to the US, Germany’s other important trading partner, fell 2.9 percent to 13.8 billion euros, while exports to Russia fell 19.3 percent to 600 million euros. Imports from Russia also fell 8 percent to 200 million euros.

According to analysts, slowing global growth, geopolitical tensions and consumers’ struggle to cope with rising inflation are negatively affecting German exports.

The fact that China is increasingly becoming a competitor rather than a target market for exports is also weighing on the German export sector.

On the other hand, according to the Institute for Economic Research (Ifo), one of Germany’s leading economic think tanks, the German export sector is entering the second half of the year with lost momentum.

Ifo’s Industrial Export Expectation Index, which was 0.2 points in May, decreased by 1.3 points to minus 1 point in June.

Klaus Wohlrabe, Director of Ifo Surveys Center, said, “There is currently no clear direction in exports. There is still a long way to go for exports to show improvement.”

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