German exports unexpectedly drop in July

Germany’s trade surplus was lower than expected in July as exports slid, according to data released by Destatis on Friday.

Adjusted for seasonal swings, the trade surplus declined to €19.4bn from a revised €21.4bn in June. Economists had been expecting a surplus of €22bn.

Exports fell 2.6% on the month, which was the worst decline in almost a year and missed expectations of a 0.3% increase.

Meanwhile, imports declined 0.7% on the month, missing forecasts of a 0.8% jump.

Claus Vistesen, chief eurozone economist at Pantheon Macroeconomics said the figures were "horrible” and July was “a write-off for the German economy.”

“The data are sending a clear signal that momentum of external demand declined over the summer.

“These data are unnerving, but the initial shock in the UK over Brexit and the Volkswagen dispute with its suppliers— which curtailed production and shipment – likely added to the weakness on exports in July, and we expect a rebound in August. In addition, if the US economy rebounds, as we expect, in Q3 it also should support German exports.”