German Exports Unexpectedly Rebound In July

German Exports Unexpectedly Rebound In July


German exports bounced back unexpectedly in July, despite the debt crisis significantly disrupting trading activities across Europe, in part due to poor demand. Imports also recorded a surprise recovery, reflecting the still-strong private consumption in the economy.
Exports increased 0.5 percent month-on-month in July on a calender and seasonally adjusted basis, the Federal Statistical Office said Friday. This was in contrast to economists' prediction of a 0.5 percent decline and comes after a 1.4 percent drop in June.
Imports gained 0.9 percent following a 2.9 percent fall in the previous month. The outcome defied expectations of a 0.3 percent fall.
Germany exported commodities to the value of EUR 93.6 billion and imported commodities worth EUR 76.7 billion in July. Compared to July 2011, exports and imports increased 9.2 percent and 1.9 percent respectively.
The foreign trade balance showed a surplus of EUR 16.9 billion in July, slightly less than EUR 18 billion in June. In July 2011, the surplus was EUR 10.4 billion. Economists had forecast a surplus of EUR 15.3 billion. In calendar-and-seasonally adjusted terms, the trade surplus was EUR 16.1 billion.
Shipments to EU member states increased at an annual pace of 4.4 percent in July, while shipments to euro area rose 3.2 percent. Exports to countries outside the European Union jumped 15.9 percent from a year earlier in July.
The German economy expanded 0.3 percent in the June quarter as robust growth in exports and domestic spending help offset a contraction in investment. However, the rate of expansion was slower than the 0.5 percent growth seen in the previous quarter.
Recent indicators also suggest that the biggest Eurozone economy is weathering the crisis better than other euro members. Data from the Federal Ministry of Economy and Technology showed Thursday that factory orders grew 0.5 percent month-on-month in July after declining 1.6 percent in June. Increases were recorded in both domestic as well as foreign orders.
However, the spreading debt woes in Eurozone prompted the Organization for Economic Co-operation Development (OECD) to downgrade the growth forecast for Germany in its latest interim assessment report released on Thursday. The German economy is now seen growing 0.8 percent this year, weaker than the 1.2 percent expansion projected in May.
Soon after, European Central Bank cut the Eurozone 2012 growth outlook range to between -0.6 percent and -0.2 percent. The risks surrounding the economic outlook for the euro area are assessed to be on the downside, the bank said. The statistical office also reported today that the current account surplus fell to EUR 12.8 billion from EUR 18.5 billion surplus in June. Economists expected a decline to EUR 13.5 billion.