German exports fall for second month: official data

8th October 2010, Comments 0 comments

German exports fell in August for the second month running, official data showed on Friday, but economists said the drop and the rise of the euro should not be a problem for the German economy.

Exports by Germany, the world's second-biggest exporter after China, declined by 0.4 percent from the level in July when they fell by 1.6 percent, the federal statistics office said.

Earlier this week however, economy ministry figures showed that industrial orders and output were much stronger than expected in August. Data for industrial orders showed that exports were not heading for a slump.

The value of German exports came to 81.8 billion euros (113.7 billion dollars) in August, the Destatis office said.

Calendar and seasonally adjusted figures provided by Destatis showed that German imports increased by 0.9 percent meanwhile to 70.1 billion euros.

The adjusted German trade surplus thus dropped to 11.7 billion euros from 12.6 billion in July.

"Today's drop should still rather be seen as a correction after the strong second quarter than a new trend," ING senior economist Carsten Brzeski said.

Germany posted record second quarter growth of 2.2 percent and should end the year with an expansion of close to 3.0 percent.

Although the euro has climbed sharply against the dollar, it has gained just six percent in trade weighted terms since June, and high-quality German goods are less price sensitive than cheaper exports are.

"If the latest appreciation of the euro doesn't accelerate strongly, the negative effects on the export outlook should remain rather limited," UniCredit economist Alexander Koch said.

"The comfortable orders backlog indicate continuing solid export growth at least until the end of this year," he added.

For Brzeski: "After the growth sprint in the second quarter, the German economy has now throttled a bit and is cruising along."

© 2010 AFP

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