Weak German trade suggests meager growth in Q3
German exports unexpectedly fell in August, data showed on Tuesday, in a fresh sign that manufacturers in Europe's largest economy shifted into a lower gear over the summer months.
The Federal Statistics Office said seasonally adjusted exports edged down by 0.1 percent on the month, missing a Reuters forecast of a 0.3 percent rise. Imports dropped by 2.7 percent, undershooting a predicted 0.2 percent fall. ING economist Carsten Brzeski blamed the low trade volumes over the summer months on a general weakening of global manufacturing activity and a temporary blip in domestic demand.
“The traditional German growth engine is stuttering once again,” Brzeski said, in reference to exports. “Luckily, the German economy is no longer running on one or two cylinders but still has solid domestic demand to lean on. At least for now.”
Household spending has become an important growth driver in Germany as consumers are reaping the benefits of record employment levels, rising real wages, increased job security and cheap credit due to the euro zone's expansive monetary policy.
The seasonally adjusted trade surplus widened to 18.3 billion euros ($21.0 billion) in August from 15.9 billion in the previous month, the data showed.
Germany's wider current account surplus, which measures the flow of goods, services and investments, rose to 15.3 billion euros from 15.1 billion euros in July, unadjusted data showed.
The trade figures chimed with data released on Monday that showed industrial output edging down unexpectedly in August, suggesting the German economy lost steam in the third quarter.
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