Germany: Exports bounce back in May, outlook remains uncertain
July 9, 2020
In May, merchandise exports grew 9.0% month-on-month on a calendar- and seasonally-adjusted basis, swinging from the steep 24.0% contraction in April. However, this is affected by the Covid-19-induced shock as exports were still down by nearly a third compared to February of this year—the month before much of the world went into lockdown. Meanwhile, imports grew 3.5% over the previous month and contrasted the 16.6% drop recorded in April. As a result, the calendar- and seasonally-adjusted trade surplus widened from EUR 3.3 billion in April to EUR 7.6 billion in May. However, this still marked the second smallest monthly trade surplus since November 2001.
On an annual basis, the picture was much grimmer. Exports continued to contract at a steep pace, falling 29.7% in May (April: -31.1 year-on-year), while a similar story played out regarding imports, which dropped 21.7% and matched the result of the prior month. On a 12-month rolling basis, exports shrank 6.1% in May (April: -3.2%) and imports contracted 4.9% (April: -2.6%). All told, the 12-month rolling sum of the trade balance narrowed to a EUR 198.9 billion surplus from EUR 208.4 billion in April.
Ines Kitzing, first vice president of the Federal Association of Wholesale, Foreign Trade and Services (BGA), commented: “Even if German imports and exports recovered slightly […] we are still miles away from normalizing foreign trade.”
Carsten Brzeski, chief Eurozone economist at ING, added: “Looking ahead, while April was the worst month ever in terms of most economic data releases, the month of May has been one of the best months ever. However, it will need a couple of these record months to bring the economy back to its pre-crisis level.”
Author: Jan Lammersen, Economist