German exports plunge at fastest pace since crisis

Germany’s exports were down in August by 5.2% dropping to €97.7bn (£71.8bn, $110.3bn) which is the largest month on month drop since the financial crisis of 2009, reported the country’s Federal Statistics Office. That’s the steepest fall since January 2009.

Imports were also down by 3.1% to €78.2bn, which amounted to the biggest monthly drop since November 2012, while manufacturing was also down from July figures by 1.3%.

Despite the large month-to-month drop, Germany exported goods to the value of €88 billion and imported goods to the value of €72.8 billion euros in August 2015, recording once again a big trade surplus. “China, where domestic demand seems to stutter, is an important factor for us as an export-oriented economy”.

Further, Brzeski noted that a weak exchange rate might not compensate for domestically-driven problems in emerging economies, while at the same time it should further boost exports to the United States as trade with the U.S. is more sensitive to exchange rate changes. The trade surplus in July was revised down to €22.4 billion.

While no country breakdown is given, economists say the weakness is likely due to a slowdown in emerging markets, after factory orders published yesterday showed a contraction in non-Eurozone foreign orders.

In its latest set of forecasts, released on Tuesday, the global Monetary Fund trimmed Germany’s growth projection for this year to 1.5 percent and the outlook for next year to 1.6 percent.