According to provisional data from the Federal Statistics office, Germany recorded a headline trade surplus of 21 billion euros for May from 19.4 billion euros in May 2015. The seasonally-adjusted surplus declined to 22.2 billion euros from a revised 24.1b euros the previous month, which was in line with market expectations. The significant monthly decline in exports will cause some concerns over global trade trends.
German exports fell sharply for the month and in seasonally-adjusted terms there was a 1.8% decline, while there was a 1.5% increase over the first five months of the year.
Seasonally-adjusted imports rose marginally for the month with a marginal 0.2% increase for the first five months of 2016.
The overall German current account surplus expanded to 115.6b euros for the first five months of 2016 from 104.5b euros the previous year as the primary income surplus widened.
There was a 2.1% increase in exports to EU countries for May with a 3.5% increase for the first five months of 2016. Exports outside the EU declined 1.3% for the first five months of the year, but with annual growth for May.
The overall export data for May was disappointing and will fuel concerns that underlying global trade is weakening with future data under close scrutiny. German competitiveness has been damaged in the UK market following the UK referendum vote and there will be further unease within Germany if the Chinese yuan weakens further, which could undermine shipments in the key auto sector, according to economiccalendar.com.
The out-performance within the EU will maintain speculation that Germany is gaining market share within Europe, which will limit the scope for trade gains in countries such as Italy and France.
The euro edged marginally lower after the data with EUR/USD at 1.1080 from 1.1085, while German bunds edged higher, although the main focus remained on global risk trends.
Last month the International Monetary Fund issued another warning about the size of Germany’s dominant trade position with the rest of the world, arguing the country should use its considerable fiscal space to fund infrastructure rather than racking up bumper savings.
Mario Draghi has also hit out at the state of Germany’s sizeable trade surplus, arguing that it has helped push down interest rates in the eurozone.
Germany has also long fallen foul of EU budget rules which limit member states to running current-account surpluses of no more than 6 % of GDP. The current account is set to hit 8.5 % this year, compared to 8.8 % in 2015, according to the European Commission.
