German Exports Slow Down, Trade Surplus Declines

German exports saw little growth in July, showed official data released on Friday by the Federal Statistical Office in Wiesbaden.

Germany exported goods worth €103.7 billion ($125.1 billion) in July 2017, an increase of only 0.2% compared to the previous month but still 8% more than in July 2016, Xinhua reported.

Imports climbed by a seasonally adjusted 2.2% on a monthly, and 9.4% on an annual basis. As a consequence, Germany’s large and persistent trade surplus declined from €22.3 billion in June to €19.5 billion in July on a non-seasonally adjusted basis.

Economists had forecast a higher surplus of €20.7 billion. Nevertheless, the country’s trade surplus was still higher than a year ago.

Berlin has been criticized internationally, including by US President Donald Trump, for its high trade surplus. The Washington-based International Monetary Fund has warned that the German trade balance is suggestive of insufficient domestic investment which could harm growth in the longer term and contribute to imbalances in the global economy.

Germany exported goods worth €59.9 billion to members of the European Union in July 2017 and imported goods worth €55.6 billion from the bloc during the same period, marking annual increases of 6.7% and 8.4% respectively. Most of that trade happens in the common currency area, with €37.9 billion (+6.9%) of exports and €38 billion (+7.5%) of imports.

German exports to non-EU countries grew by 9.7% to €43.8 billion in July 2017 compared to the same month last year, while imports grew by 11.5% to €28.6 billion during the same period.

The figures published by the Wiesbaden-based statisticians may add to fears that the euro’s current strength is undermining the bloc’s export competitiveness. European Central Bank President Mario Draghi has warned recently that the currency’s increase in value “represents a source of uncertainty.”

Speaking to Xinhua,  Andrae Gaerber, economics expert at the Friedrich-Ebert-Stiftung  think tank, rejected claims that Germany’s export-oriented growth model was a thing of the past. “There was no significant seasonally-adjusted reduction in the (trade) surplus,” Gaerber noted.

Furthermore, Gaerber did not perceive any convincing signs of a long-term shift from exports to domestic consumption as the key driver of German growth.