Germany: Exports bounce back in September
November 8, 2010
Despite the strong euro, overseas sales expanded in September, powered by strong demand from China. In September, exports expanded 3.0% in seasonally and working day adjusted terms over the previous month (+22.5% year-on-year), after two consecutive months of decline. The monthly reading contrasted the 0.2% contraction observed in August and surprised the market, which had exports rising 1.5%. Imports fell 1.5% over the previous month (+18.0% yoy), contrasting the 0.3% increase recorded in August. As a result, the trade balance surplus widened from EUR 9.0 billion in August to EUR 16.8 billion in September, which marked the highest level since March this year. Exports are likely to continue expanding, albeit at a more moderate pace, as persistent strengthening of the euro may diminish sales prospects outside the European Union. Moreover, the strong fiscal tightening in several Eurozone countries, which remain a key export destination for German manufacturers, may dent export demand.
Author: Ricardo Aceves, Senior Economist