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German exports collapsed in July

German exports unexpectedly collapsed by 10% in July 2016, which is the biggest drop in nearly an year, giving a sign of difficult quarter for European largest economy. The total worth of the German export amounted to 96.4 billion EUR, while imported goods amounted to 76.9 billion EUR. Based on preliminary data of the Federal Statistical Office (Destatis), German exports reported a decline of 10% yoy, while imports decreased by 6.5% yoy. On month-on-month basis the exports decreased by 2.6% and imports by 0.7% on a calendar and seasonally adjusted basis.

The German foreign trade balance showed a surplus of 19.5 billion EUR in July 2016. According to preliminary results of Deutsche Bundesbank, the current account balance showed a surplus of 18.6 billion EUR in July 2016. For comparison, in July 2015, the German current account showed a surplus of 25.4 billion EUR.

In July 2016, Germany exported goods worth 56.3 billion EUR to the European Union countries, while EU imports amounted to 51.3 billion EUR. Compared with July 2015, the exports to EU countries decreased by 7% and imports by 4.5%. The export to the Eurozone countries amounted to 35.5 billion EUR, while imports amounted to 35.4 billion EUR. The exports of goods to non-EU countries amounted to 40.1 billion EUR, while imports from these countries amounted to 25.6 billion EUR.

The statistical data shows the grim picture of German production with a decline in industrial orders in July. The surprisingly weak trade data reinforce concerns about economic growth. If the German economy continued slowdown in the coming months, it will provide support for the newly launched discussions on the fiscal stimulus.

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