German Exports Register Steepest Decline in nearly Seven Years

European stocks declined as investors speculated on the implications for euro-area growth of worse-than-expected German export data.

German exports recorded a drop of 5.2 percent in August compared with July, marking the largest decrease since the height of the 2009 recession.

Economists said the data appeared to have been weighed down by the large number of holidays in August this year.

This is the biggest one month drop since November 2012. In fact, the economy seems to go through the same vacation dip it experienced last summer. At the same time, imports tumbled by 3.1 percent to 72.8 billion euros, and the country’s trade surplus narrowed to 19.6 billion euros. Germany’s leading economic institutes are set to lower their growth forecast for 2015 to about 1.8pc from a previous estimate of 2.1pc, Reuters reported.

The trade surplus shrank to €15.3bn from €25bn in July, according to the report. However, on a year-on-year basis, both exports and imports were higher by 5.0% and 4.0%, respectively.

Germany’s current account balance, a broad measure of an economy’s global financial position, showed a surplus of €12.3 billion in August in unadjusted terms. The carmaker accounted for 17.9% of Germany’s €1.1tn of export revenues a year ago.

But following sharp declines in industrial orders and output during the month, it also suggested that waning demand from overseas, particularly China and other emerging markets is beginning to leave its mark on Germany.