Germany Exports Down During July

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Germany Exports Down During July

Germany's Exports Down By 0.9% During July

The data from the federal statistics have revealed that exports from Germany dropped by 0.9% during July. The main reason behind this drop is slow global demand, which continues to falter with each passing month.

However, the drop in Germany's exports was still a lot lower than the economists forecast of -1.5%. So, on that front, that's good news, but we still can't ignore the contraction in exports.

According to Carsten Brzeski from ING, growth arising from trade is a thing of the past now as it is now just dragging down the economy. They also highlighted the presence of friction in the supply chain along with problems in China.

In addition, the global economy today is more fragmented when compared with the past. So that's yet another factor which is weighing heavily on the exports from Germany.

German Imports Up B 1.4%

Although the exports declined during July, the imports of Germany actually jumped by 1.4%, which suggests early signs of a trade imbalance.

Overall, Germany's trade balance was $17.5 billion, or around 15.9 bn euros. Just a month earlier, the trade balance was around 18.7 billion EUROS, which suggests that things are further deteriorating.

During July, the retail sales also went lower along with the exports, which has made it difficult for the German economy to find a strong footing during Q3 2023. In fact, the risk of the German economy falling into contraction has increased manifolds.

According to an economist from a prestigious institution, German products are no longer as competitive in the global market as they used to be! So besides the weak global demand, that's yet another factor that is making it difficult for Germany to achieve export growth.

That's why as long as these factors remain in effect, the chances of strong growth in German exports will remain a dream at best. However, a drop in inflation worldwide and an increase in income will recover the global demand and thus help the German economy.

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