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German exports in August drop more than expected

October 5, 2023

Europe has been grappling with high inflation and an industrial slowdown, and weakening demand from China has taken its toll on Germany's export-oriented economy. However, the country's trade surplus saw a modest rise.

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Containers at Hamburg port
Germany registered a 1.2% month-on-month decrease in exports in AugustImage: Marcu Brandt/dpa/picture-alliance

German exports fell by 1.2% in August compared to the previous month, according to figures from the federal statistics agency Destatis.

Analysts interviewed by FactSet Research had predicted a smaller decrease of 1%.

Exports in August totaled €127.9 billion ($134.5 billion), Destatis said. This represented a year-on-year decrease of 5.8%.

Imports were down 0.4% compared with the previous month, totaling €111.4 billion.

The country's trade surplus saw a modest rise, up to €16.6 billion.

However, the export balance for the first eight months of 2023 was positive, with the value of exported goods rising by 1.7% to €1.05 trillion. Last year, German foreign trade achieved a record nominal result, partly due to price increases.

Germany 'between recession and stagnation'

"Like the rest of the German economy, exports remain stuck in the twilight zone between recession and stagnation," ING bank economist Carsten Brzeski was cited by the Agence France-Presse (AFP) news agency as saying.

"The risk of the German economy of sliding back into recession in the third quarter remains high," he said.

"Ultimately, the weak exports should not come as a surprise, as the global export volume has now been stagnating for two years," VP Bank chief economist Thomas Gitzel was cited by the German Press Agency (dpa) as saying. "Exports were already clearly in reverse in July, and now we have to accept a significant decline in August as well," he said.

A 2.6% fall in exports to eurozone countries was registered in August, alongside a 1.3% in shipments to the United States.

Europe has been grappling with high inflation and an industrial slowdown, and weakening demand from China has taken its toll on Germany's export-oriented economy.

The International Monetary Fund (IMF) has predicted that Germany will be the only major advanced economy to shrink in 2023.

Last week, Germany's leading economic institutes said they expected GDP to shrink by 0.6% this year.

sdi/kb (AFP, dpa)

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