Fall in German Trade Balance
The German statistics department has just published the country’s trade data for the month of February. The overall trade balance figure has fallen but is still a healthy €15.7B, this is down on the previous month of €17.2B and also missed market expectations of €17.8B.
Looking at the constituent parts of this trade figure shows that Exports fell 1.3%% in February against a January rise of 2.2%, this missed the markets estimate for a slight fall off of -0.5%. Imports into Germany increased in February, the month on month number is 0.4% against an estimate of 0.1% growth and January’s 4.1%.
This is all contributing to a February Current Account Surplus of €13.9B for Europe’s largest economy, for comparison purposes €16.2B was the January surplus.
There is no doubt that the German economy is the star of the Eurozone with low unemployment, relatively low debt levels and impressive growth given the circumstances. Despite the slight fall off in trade, today’s trade numbers simply serve to reinforce this fact. Germany however has is an integral part of the Eurozone and it’s economic fate is tightly bound to that of it’s neighbours. Not simply because of a shared monetary policy and a common currency but because Germany depends on consumer demand within the rest of the Eurozone in order to keep it’s manufacturing sector exporting.
Beyond the Eurozone Germany exports will have suffered from a rising Euro, the slippage in competitiveness is beginning to hurt Germany and the Euro zone. Confidence in the wider Eurozone has been suffering of late, particularly as the markets watch the European Central Bank struggle to get to grips with the blocs lack of price growth. Last months Harmonized Index of Consumer Prices fell to 0.9% from 1.0%, we will get an update on this number tomorrow morning and the markets will eagerly be anticipating this insight
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