Germany: Exports decline in August
October 8, 2010
Exports fell for a second consecutive month, amid signs of a slowdown in global demand and a strengthening euro. In August, exports slipped 0.4% in seasonally and working day adjusted terms over the previous month. However, the monthly reading came in above the 1.6% contraction observed in July and was virtually in line with market expectations of a 0.3% drop. Simultaneously, imports grew 0.9% over the previous month, contrasting the 2.2% decline registered in July. On an annual basis, exports expanded 26.8% in August, up from the 18.6% increase tallied in July. Imports rose 29.2% in August, also above the 24.9% expansion recorded in July. As a result, the trade balance narrowed from EUR 9.1 billion in July to EUR 4.6 billion in August, which marked the second lowest level so far this year. Exports are likely to continue expanding on an annual basis, albeit at a more moderate pace, as slowing global demand and a stronger euro diminish the sales prospects outside the European Union.
Author: Ricardo Aceves, Senior Economist