German trade surplus misses forecasts amid sluggish exports

Germany's seasonally adjusted trade surplus fell to €14.4bn in May, from a revised €16.5bn and well below the consensus of €17.5bn, according to official data published on Tuesday.

Exports in May rose 0.1% month-on-month, but were down 0.7% on an annual basis. Imports increased 1.7% compared with April, contributing to a narrower trade balance.

"Since last summer, German exports have been extremely volatile. However, the general trend is pointing downwards, not upwards," said analysts at ING.

"Trade is no longer the strong resilient growth driver of the German economy that it used to be, but rather a drag. Supply chain frictions, a more fragmented global economy and China increasingly being able to produce goods it previously bought from Germany, are all factors weighing on German exports."

Reporting by Frank Prenesti for Sharecast.com