German exports fall more than expected in August

German exports fell more than expected in August, adding to expectations of a recession in the third quarter, according to figures released on Thursday by Destatis.

Exports fell 1.2% from July to €127.9bn, versus expectations for a 0.4% decline. Meanwhile, imports dipped 0.4% to €111.4bn, compared to expectations for a 0.5% increase.

The trade surplus, which is the difference between exports and imports, came in at €16.6bn in August following an upwardly-revised €17.7bn a month earlier.

Carsten Brzeski, global head of macro at ING, said: "Like the rest of the German economy, exports remain stuck in the twilight zone between recession and stagnation. Since the start of 2022, net exports have been a drag on the economy in four out of six quarters. 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 the German export sector.

"The cooling of global demand is currently worsening the structural problems and the weakening of the euro since the summer is still too small to have any significant impact on exports. As a result, trade is no longer the strong resilient growth driver of the German economy that it used to be, but rather a drag.

"With the drop in retail sales and today’s disappointing export data, the risk of the German economy of sliding back into recession in the third quarter remains high."