Germany’s exports declined more-than-expected in October and imports logged its biggest fall since 2012, reflecting a weak start to the fourth quarter.
Exports fell 1.2 percent in October from September, when they advanced 2.6 percent, figures from Destatis revealed Wednesday. Shipments were expected to fall 0.6 percent.
Likewise, imports declined 3.4 percent in contrast to September’s 3.8 percent increase. This was the biggest fall since April 2012, when shipments slid 3.5 percent. Economists had forecast a 1 percent drop for October.
As imports dropped more than exports, the trade surplus rose to a seasonally adjusted EUR 20.8 billion in October from about EUR 19.2 billion a month ago.
The October drop in exports is a technical correction after strong September data, rather than a structural shift, Carsten Brzeski, an ING Bank NV economist, said.
Brzeski noted that the European Central Bank’s quantitative easing programme and more specifically the weak euro have been an extremely well-targeted stimulus package for German exports.
Due to too many economic slowdowns and geopolitical conflicts around the world, exports will continue having troubles gaining more momentum, Brzeski added. However, as long as the ECB continues with easing, exports should remain supportive to growth.
In the third quarter, economic growth slowed to 0.3 percent due to weak foreign trade and investment. However, the Bundesbank last week said economic growth will pick up to 1.8 percent next year as exports are set to recover.
On a yearly basis, growth in exports eased to 3.3 percent from 4.3 percent. Similarly, the increase in imports slowed to 3 percent from 4 percent.
On an unadjusted basis, the trade surplus fell slightly to EUR 22.5 billion from EUR 22.8 billion in September. It was expected to decrease to EUR 21.7 billion.
At the same time, the current account of the balance of payments showed a surplus of EUR 23.0 billion, which was below last month’s EUR 25 billion surplus.
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