German exports fall more than expected in June

Berlin. German exports fell more than expected in June due to weak demand from the United States, the country’s main trading partner, and the rest of the European Union, official data showed on Wednesday.

Germany, Europe’s largest economy, exported 3.4 percent fewer goods in June than the previous month, the Federal Statistics Office said. That was more than double the 1.5 percent decline forecast by analysts in a Reuters poll.

The foreign trade surplus, meanwhile, narrowed to 20.4 billion euros ($22.3 billion) from 24.9 billion euros in May, falling short of analysts’ expectations of 23.5 billion euros.

The trade data was yet another bad piece of news for the German economy, which entered contraction territory in the second quarter of 2024, raising the spectre of recession once again, as the country fails to turn things around after years of weak foreign demand, high inflation and sluggish consumer spending.

German industrial data, however, gave reason for optimism.

In addition to the trade data, the Federal Statistical Office recorded a 1.4 percent rise in industrial output in June, above expectations. Industrial orders also rebounded strongly that month, but economists have warned that the overall outlook for the German economy remains bleak.

According to Jens-Oliver Niklasch, chief economist at LBBW, exports to the United States, which fell by 7.7 percent in June compared with the previous month, could suffer even more now that the economy is showing signs of weakness. “The environment for the German export industry remains difficult,” he said.