German exports drop again in October

German exports fell in October for the second month in a row, official data showed Friday, as high inflation and soaring energy prices weigh on Europe’s largest economy.

Germany exported 133.5 billion euros’ ($140 billion) worth of goods in October, a 0.6-percent drop on the previous month, according to seasonally-adjusted figures from federal statistics agency Destatis.

The dip surprised analysts surveyed by Factset, who had expected a slight jump in exports.

The setback, which comes after exports already slipped by 0.5 percent in September, was mainly down to softer demand from European Union countries, according to Destatis.

The continent is reeling from the fallout of Russia’s war in Ukraine, which has pushed up energy prices and sent inflation soaring to record heights.

The cost-of-living squeeze coupled with lingering global supply chain issues have left Germany bracing for a recession.

In a sign of cooling consumer demand, imports plunged 3.7 percent in October month-on-month to 126.6 billion euros — widening Germany’s trade surplus to 6.9 billion euros.

The United States remained the country’s biggest customer in October, despite a steep 3.9 percent decline in demand for “made in Germany” goods.

Shipments to key market China meanwhile were flat, dampened by Beijing’s ongoing Covid-19 related restrictions.