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German Trade Balance Falls Again

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German Trade Balance Falls Again

German trade figures deteriorated slightly in the month of March according to figures released by Statistisches Bundesamt Deutschland earlier this morning. The overall Trade Balance for the month came in at €14.8Bn, this represented a fall off from the February number of €15.8Bn and both surprised and disappointed markets that were expecting an increase to €16.6Bn in these trade figures.

An examination of the component parts of the trade data reveals lower activity on both the import and the export side of the equation. The rate of change in Exports month on month was a fall of 1.8%, this follows a drop of 1.3% in February and market consensus was for an increase of 1.0%. The large fall in Exports was met with a smaller drop in the Import numbers, month on month these contracted by 0.9%, which represents a turnaround on February’s 0.4% expansion and also disappointed the market which was anticipating a further 0.5% rise in exports.

Germany’s Trade Balance has now fallen for two consecutive months and the drop in Exports is the largest fall in over a year for this renowned exporting nation. The emerging market slowdown, particularly the Chinese slowdown is now beginning to have an effect on developed nations trade activity. Geopolitical tensions are also affecting German trade, in particular the Ukrainian situation is weighing on Exports, for example Germany’s exports to Russia are off by over 15% on the year to date. The strong Euro however does not appear to be an issue, growth in both exports and imports to countries outside the Eurozone continue outpace those within the single currency bloc.

Offsetting the soft trade data for Germany for the month was a better than expected improvement in the country’s Current Account. A surplus of €19.5Bn has been reported for March, this easily improves on the revised February figure of €13.8Bn.

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