German exports plunge, fuelling slowdown fears


Frankfurt (AFP)

German exports fell sharply in July as demand weakened from outside the euro area, official data showed Friday, adding to a gloomy picture of slowing growth for the EU's economic powerhouse.

Compared to June, exports dropped by 2.6 percent to 97.1 billion euros ($109.4 billion) in seasonally adjusted terms, the federal statistics office Destatis calculated, marking the biggest monthly fall since August 2015.

Sales to countries outside the European Union such as China and the United States suffered the most, while there was also a steep fall in demand from non-eurozone EU countries, which include Britain.

The July figures cover the first few weeks after Britain's shock vote to leave the bloc, fuelling fears the seismic event could put the brakes on trade with Germany's third-largest export market.

"Either the entire industry took an early and long summer break, or Brexit and a general weakness in Germany's main export partners left another mark on the economy," said Carsten Brzeski, chief economist at ING-Diba.

Destatis said it would release Germany's trade figures with Britain later this month.

Germany's overall imports -- a measure of domestic demand -- were also down in July to 77.7 billion euros, a drop of 0.7 percent.

Taken together that means that Germany's trade surplus shrank to 19.4 billion euros from 21.7 billion euros in June, the statisticians said.

The figures are the latest in a series of disappointing data for the German economy, after production took a surprise tumble in July while demand for industrial orders showed only a slight increase.

"The month of July was clearly not a good month for Germany," said Brzeski.

Germany's Bundesbank expects the economy to grow by 1.7 percent this year and 1.4 percent in 2017, according to forecasts released before the Brexit referendum.