Germany: Unexpected hit for exports and imports data - ING

Carsten Brzeski, Chief Economist at ING, explains that the latest trade data confirm that the German economy has had a weak start to the new year as both exports and imports took an unexpected hit in February.

Key Quotes

“Exports dropped by 3.2% MoM (from -0.4% in January), while imports decreased by 1.3% MoM, (from -0.4%). The trade surplus widened somewhat, from 17.3bn euro in January to 18.4bn euro in February.”

“Still, even though the current stage of the global trade conflict seems to be limited to China and the US, Germany could become the first prominent victim outside of these two countries. China announced to impose a 25% import tariff on cars produced in the US. This would immediately harm Germany as the single largest car exporting company in the US is in fact a German car manufacturer.”

“While the prospects for the German export machinery have deteriorated significantly in recent weeks, the present state of the economy gives some reasons for concern. In fact, the entire start to the year 2018 has been a disappointment. Sentiment indicators have started to weaken, albeit from record highs, and industrial data for the first two months showed the weakest performance since 2009.”