Germany: More gloom as exports dip in September
November 3, 2023
German exports dropped sharply in a year-on-year comparison for September, with imports plummeting even further.
The figures, published by the federal statistics agency Destatis on Friday, further highlight the difficulties faced by German businesses with reduced demand both at home and abroad.
How do the numbers stack up?
Compared with August, exports for September fell by 2.4%, a bigger drop than the 1.1% expected by experts.
Exports fell 7.5% compared with September 2022, with imports falling by a startling 16.6%.
Destatis said a fall in exports to China of 7.6% from August had weighed heavily on the figures. Shipments to the United States were down 4%, and exports to other EU countries dropped by 2.1%.
Germany's trade surplus — the difference between exports and imports — fell to €16.5 billion from €17.7 billion in August.
On one positive note, the agency revised its figures for August to show a 0.1% growth in exports month-on-month rather than a decline as had been reported previously.
What do the figures indicate?
The drop could lead to a downward revision to an estimate earlier this week that Germany's gross domestic product fell by 0.1% in the third quarter of 2023.
"Like the rest of the German economy, exports remain stuck in the twilight zone between recession and stagnation," said ING bank economist Carsten Brzeski.
He said supply chain frictions, a more fragmented global economy, and China becoming more of a competitor than an important destination for products were all weighing heavily on exports. Trade has also been harmed by stubbornly high energy prices, slowing demand due to inflation, and elevated interest rates.
"Maybe the only upside of today's disappointing data is that things can hardly get worse," Brzeski said. "However, as positive signals remain absent, the base case for the German economy over the next months remains stagnation at best."
The German government in October predicted the economy would contract by 0.4% this year, a sharp downgrade from previous government forecasts.
The International Monetary Fund forecasts that Germany will be the only major advanced economy to contract in 2023, creating a drag on growth in the wider eurozone.
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