Weak trade data raises concerns over strength of German economy
German exports and imports have both seen significant declines in February, raising concerns about the strength of the Europe’s largest economy.
German exports and imports have fallen more sharply than expected in February, according to data released by the country’s Federal Statistics Office on Monday.
The data has raised concerns about the strength of Europe’s largest economy at a time when the eurozone is dealing with a myriad of headwinds, including the ongoing uncertainty over Brexit.
German exports suffer as global demand falls
With the global economy showing signs of slowing down, German exports have fallen in the first quarter of 2019, with trade disputes and Brexit turmoil adding to an already challenging economic environment.
On Monday, Germany’s Federal Statistics Office said that seasonally adjusted exports fell by 1.3% in February, representing the largest decline in 12 months. Meanwhile, imports fell by 1.6%.
As a result, Germany’s trade balance has widened to €17.9 billion in February as Europe’s largest economy continues to battle with global uncertainty.
German exports unable to defy global trade crises
Exporters in Germany have had to wrestle with a litany macroeconomic issues over the last 12 months, including trade tensions between the US and China, Brexit uncertainty and signs of a global economic slowdown.
‘There simply seem to be too many crises in global trade for the German export sector to defy all of them at the same time,’ Chief Economist at ING Germany Carsten Brzeski said.
‘Despite the euro’s weakness vis-à-vis the US dollar, Germany’s real effective exchange rate had appreciated significantly since the start of 2017 on the back of falling emerging market currencies.’
‘The currency tailwind German exporters experienced between 2015 and early 2017 had turned into a headwind,’ he added.
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