Germany: Merchandise exports rebound in August, but outlook clouded
Merchandise exports rose 1.6% in month on month in August, swinging from July’s 1.6% increase. Meanwhile, merchandise imports rose 3.4% in monthly terms in August (July: +0.1% mom).
As a result, the merchandise trade balance deteriorated from the previous month, recording a EUR 1.2 billion surplus in August (July 2022: EUR 3.4 billion surplus; August 2021: EUR 13.7 billion surplus). Lastly, the trend deteriorated, with the 12-month trailing merchandise trade balance recording a EUR 84.6 billion surplus in August, compared to the EUR 97.1 billion surplus in July.
Carsten Brzeski, global head of macro at ING, added:
“Trade is no longer a growth driver but has become a drag on German growth. Since the second quarter of 2021, the growth contribution of net exports has actually been negative. In the past, the current weakness of the euro would at least have brought some smiles to German exporters’ faces. Like almost no other, German exports have often seen an asymmetric reaction to exchange rate developments. The negative impact of a stronger currency is cushioned by inelastic demand and high product quality, while the full price impact of a weaker currency normally adds to export strength. Not this time around.”