Slumping German exports reinforce fears of weak Q2

FRANKFURT: German exports saw a massive slump in June compared to a year ago, official data showed Friday, rounding off a run of weak data pointing to a shaky second quarter.

At 106.1 billion euros ($118.8 billion), the country sold 8.0 percent less abroad than in June 2018, federal statistics authority Destatis said. “Today’s trade data marks the end of a disappointing second quarter,” said ING economist Carsten Brzeski.

“A small contraction (in GDP) has just become more likely.” In the near term, the fall was less dramatic, coming in just 0.1 percent lower than in May, adjusting for seasonal and calendar effects.

With imports growing slightly monthon-month, to 89.3 billion euros, Germany’s politically divisive trade surplus shrank to 18.1 billion, after 18.7 in May. In a geographic breakdown, exports to countries outside Germany’s EU neighborhood fell back most dramatically compared with last June, shedding 10.7 percent. The fall was less dramatic for exports to countries that share the euro single currency, at 5.6 percent.

Imports from non-EU countries also fell sharply, losing 8.9 percent, more than double the fall for EU goods. Indicators of business, consumer and investor confidence in Germany have suffered as a commercial conflict between Washington and Beijing intensifies.

There are fears President Donald Trump could open a second trade war front against the European Union. Along with factors like Brexit and weakness in emerging markets, the effects have braked the traditionally strong manufacturing sector. Over the full year, government and independent forecasters have slashed their growth predictions, to between 0.5 and 1.0 percent.