Ger­man ex­ports plunge, fu­elling slow­down fears

The Myanmar Times - - Business | International -

GER­MAN ex­ports fell sharply in July as de­mand weak­ened from out­side the euro area adding to a gloomy pic­ture of slow­ing growth for the EU’s eco­nomic pow­er­house.

Com­pared to June, ex­ports dropped by 2.6 per­cent to 97.1 bil­lion eu­ros (US$109.4 bil­lion) in sea­son­ally ad­justed terms, the fed­eral sta­tis­tics of­fice Des­tatis cal­cu­lated, mark­ing the big­gest monthly fall since Au­gust 2015.

Sales to coun­tries out­side the Euro­pean Union such as China and the United States suf­fered the most, while there was also a steep fall in de­mand from non-eu­ro­zone EU coun­tries, which in­clude Bri­tain.

The July fig­ures cover the first few weeks af­ter Bri­tain’s shock vote to leave the bloc, fu­elling fears the seis­mic event could put the brakes on trade with Ger­many’s third-largest ex­port mar­ket.

“Ei­ther the en­tire in­dus­try took an early and long sum­mer break, or Brexit and a gen­eral weak­ness in Ger­many’s main ex­port part­ners left an­other mark on the econ­omy,” said Carsten Brzeski, chief economist at ING-Diba.

Des­tatis will re­lease Ger­many’s trade fig­ures later this month.

Ger­many’s over­all im­ports – a mea­sure of do­mes­tic de­mand – were also down in July to 77.7 bil­lion eu­ros, a drop of 0.7pc.

Taken to­gether, that means that Ger­many’s trade sur­plus shrank to 19.4 bil­lion eu­ros from 21.7 bil­lion eu­ros in June, the statis­ti­cians said.

The fig­ures are the lat­est in a se­ries of dis­ap­point­ing data for the Ger­man econ­omy, af­ter pro­duc­tion took a sur­prise tum­ble in July while de­mand for in­dus­trial or­ders showed only a slight in­crease.

“July was not a good month for Ger­many,” said Mr Brzeski.

Ger­many’s Bun­des­bank ex­pects the econ­omy to grow by 1.7pc this year and 1.4pc in 2017, ac­cord­ing to fore­casts re­leased be­fore the Brexit referendum. –

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