German Exports Log Unexpected Fall

(RTTNews) - Germany's exports registered a surprise drop in May, while imports rebounded after falling for two straight months, reflecting uncertainties surrounding the global demand and the contribution of net trade to economic growth. Exports decreased 0.1 percent month-on-month in May, reversing a 1.0 percent gain in April, data from Destatis showed on Tuesday. Shipments were forecast to grow 0.3 percent.

At the same time, imports rebounded 1.7 percent after a 0.1 percent drop. However, this was weaker than economists' forecast of 3.1 percent.

As a result, the trade surplus declined to EUR 14.4 billion from EUR 16.5 billion in April. The surplus was seen rising to EUR 17.5 billion.

On a yearly basis, the decline in exports deepened to 4.0 percent from 1.7 percent. Imports posted an annual fall of 10.6 percent following April's 11.2 percent decline.

Due to a sharp fall in imports, the trade surplus increased to an unadjusted EUR 13.4 billion from EUR 4.9 billion in the previous year, data showed.

Most German exports went to the U.S., but were 3.6 percent lower compared to the previous month. Imports from the country fell 5.7 percent.

Exports to China and the UK increased 1.6 percent and 5.8 percent, respectively. Imports from China increased 2.7 percent and that from the UK grew 15.3 percent.

"Today's numbers are rather another illustration that sluggish exports are not an exception but rather the new normal," ING economist Carsten Brzeski said.

In the near term, the ongoing weakening of export order books, the expected weakness in the US economy together with high inflation and uncertainty will have an impact on German exports, the economist added.