German trade surplus narrows in July amid plunge in exports

Germany's foreign trade surplus in goods shrank in July amid a plunge in exports centred on countries from beyond the European Union, but nevertheless came in ahead of consensus.

According to the Federal Office of Statistics, in seasonally adjusted terms the country's shortfall on trade with the rest of the world narrowed to €5.4bn.

That was down from the €6.2bn recorded in June but €200m above economists' forecasts.

Destatis highlighted the 15.1% month-on-month drop in exports to the Russian Federation to reach €1.0bn, for a year-on-year decline of 55.1%.

Total goods exports shrank by 2.1% on the month to reach €131.3bn, while imports were 1.5% lower to €125.9bn.

Exports to the EU were up by 1.0% over the month to €73.4bn but those to third countries dropped by 5.6% to €58bn.

Imports from all geographic regions slipped with the exception of those from non-Eurozone EU nations, which rose by 1.9% on the month to €20.2bn.

In nominal and non-seasonally adjusted basis, exports were ahead by 10.8% on the year and imports 26.1% higher, driving the surplus down from July 2021's level of €17.8bn to €4.9bn.

"It is too early to say anything for certain about Q3, but today's report points to upside risk for net exports in goods in this quarter," said Claus Vistesen, chief Eurozone economist at Pantheon Macroeconomics.

"In real terms, the trade surplus would jump by 22% quarter-on-quarter if the value for July was unchanged through the quarter, after recent revisions. That probably won’t happen, but it is a good start."