German exports dropped for the fifth straight month in February, but the pace of decline was less than expected.
Wednesday, the Federal Statistical Office reported that calendar and seasonal adjusted exports decreased 0.7% month-on-month in February, subsequent to 7.4% decline in January. Meanwhile, economists had forecast a 3.3% decline. On an annual basis, overseas sales plunged 23.1% in February versus a 23.2% fall in January.
Commerzbank analyst Simon Junker said exports are a burden on the German economy, and in the first quarter of this year they probably fell even stronger than at the end of 2008. There is no prospect of a short-term improvement, the analyst said.
On a monthly basis, imports fell for the fifth straight month with February recording a 4.2% decline after a slower 1.8% drop in January. On an annual basis, imports were down 16.4% following a 13.7% decrease in the prior month. The annual fall in imports extended for the fourth straight month.
The foreign trade balance showed a surplus of EUR 8.7 billion in February, down from EUR 17.1 billion surplus recorded in the same month of the previous year. Upon calendar and seasonal adjustment, the foreign trade balance recorded a surplus of EUR 8.9 billion.
According to provisional results of the Deutsche Bundesbank, the current account of the balance of payments showed a surplus of EUR 5.6 billion in February. It included a deficit of EUR 0.4 billion in services, EUR 3.7 billion surplus in factor income, EUR 5.3 billion deficit in current transfers and EUR 1 billion shortfall in supplementary trade items. In the previous year, the German current account showed a surplus of EUR 16.5 billion.
In February, Germany dispatched commodities to the value of EUR 41 billion to the Member States of the European Union, while it received commodities to the value of EUR 37.1 billion from those countries. It showed an annual decrease of 24.4% in exports and a 14.8% fall in imports.
Commodities to the value of EUR 28.6 billion were dispatched to the euro area countries, down 22.5% year-on-year, while received commodities worth the value of EUR 27 billion, a decline of 13.1% over the previous year.
Exports to EU countries, other than the euro area declined 28.6% year-on-year, while imports from those countries dropped 19.1%. Shipments to countries outside the European Union decreased 20.6%, and imports from those countries fell 19.2%.
Export orders have fallen massively in the last few months. So we are unlikely to see an improvement in foreign trade in the months ahead, Junker said.
The economist said situation in the buyer countries is expected to improve in the second half of this year only. Germany's exports are then likely to revive as globally low interest rates stimulate demand especially for capital goods.
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