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German Exports Rise on "Low-Hanging Fruits" of Recovery

German exports rose for the fourth month running and by more than expected in August, boosting hopes for a robust third quarter in Europe’s largest economy after the coronavirus shock earlier in the year.

Seasonally adjusted exports rose 2.4% on the month after a 4.7% rise in July, the Federal Statistics Office said. Imports rose by 5.8% after a rise of 1.1% the previous month. The trade surplus narrowed to 15.7 billion euros ($18.5 billion), it said.

Economists polled by Reuters had expected exports and imports to both rise by 1.4%. The trade surplus was forecast at 18.2 billion euros.

“The export economy has been reaping the low-hanging fruits in recent months,” VP Bank economist Thomas Gitzel said, adding that subsequent months would be harder.

“The worst is behind us, but this does not mean that the German economy is immune to short-term setbacks.”

On the year, the Office said exports to China fell by just 1.1% in August, whereas “exports to the United States, which was particularly affected by the corona pandemic, fell by 21.1%”. Exports to the United Kingdom were down 7.3% on the year.

The German economy contracted by 9.7% in the second quarter as household spending, company investments and trade collapsed at the height of the pandemic.

Official data released on Tuesday showed orders for German-made goods rose 4.5% in August, more than expected.

An easing of lockdown measures, coupled with an unprecedented array of rescue and stimulus packages, has led to a robust recovery in the third quarter, but a spike in new coronavirus cases has caused concern activity could slow again.

Economy Minister Peter Altmaier said on Monday Germany must avoid another shutdown of industrial activity.

The Ifo institute expects 6.6% output growth in the third quarter, then a slowing to 2.8% in the fourth quarter.

$1 = 0.8495 euros

Reporting by Paul Carrel; editing by Thomas Seythal

Source: Reuters

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