Economic Indicators

German Exports Hit Biggest Decline in 2 Years

German exports declined suddenly in February, posting their biggest monthly drop in 2-1/2 years and narrowing the trade surplus, in a further sign that growth in Europe’s biggest economy could have reached its top.

Exports that are seasonally adjusted fell by 3.2 percent on the month, the sharpest decline since August 2015, according to the data from the Federal Statistics Office. Imports dropped by 1.3 percent.

A poll had pointed to exports edging up by 0.2 percent on the month and imports rising by 0.3 percent.

German Trade Surplus

The seasonally adjusted trade surplus narrowed to 19.2 billion euros ($23.6 billion) from 21.5 billion euros in January, the lowest since January 2017.

Germany’s wider current account surplus, which measures the flow of goods, services, and investments, edged up to 20.7 billion euros from 20.3 billion euros in January, unadjusted data showed.

Andreas Scheuerle from DekaBank said the data pointed to a disappointing first quarter.

“It’s hard to explain the reasons for this weak start to the year because the good economic conditions have not changed over the past three months,” Scheuerle said, adding that record employment and rising wages were a good omen for domestic demand.

He added that protectionist threats from U.S. President Donald Trump could hardly be the main reason for the February decline in German exports.

Still, the prospect of Germany getting caught in the cross-fire of a trade war between the United States and China is worrying German businesses.

German Import Duties, Others

The DIHK Chambers of Commerce and Industry said last week an escalation of the dispute over import duties could harm the global economy and weaken demand for German goods and services.

Official data last week showed German industrial output fell by the most in more than two years in February. The Economy Ministry said the industry was losing momentum.

Chancellor Angela Merkel is due to visit U.S. President Donald Trump on Friday.

Merkel’s trip, three days after French President Emmanuel Macron’s state visit to Washington, comes just before the expiry of an exemption for the European Union from U.S. import duties on steel and aluminum.

The visits give the EU leaders an opportunity to lobby for the bloc to be exempted permanently from the tariffs which are suspended for the EU until May 1.

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