The foreign trade balance has widened in the month of July with an increase in exports in Germany. This is a surprising increase, which gives a boost to the economy.
The foreign trade balance has gone up for the month of July. It has risen from 16.6 billion Euros to 21.4 billion Euros, which is $23.6 billion. Exports have gone up while imports have fallen.
The trade surplus has widened the most over the past four months in Germany. Exports have increased, defying economists’ expectations.
The trade war between the U.S. and China has deeply disrupted the German economy indirectly. Business confidence has dropped with industrial production worst hit.
Exports have increased by 3.8 percent year-on-year touching 115.2 billion Euros in July 2019, with a jump in sale to other countries. Meanwhile, imports have fallen by 0.9 percent to 93.7 billion Euros.
Shipments have risen for the month of July by 0.7 percent from the previous estimate.
Germany has been seeing strong exports especially through the export of vehicles and machinery, since 1952. As the German economy depends on its exports, the global slowdown has hit the country most. The Brexit uncertainty and trade dispute have hurt exports and brought down employment levels.
The current trade data has brought in a “weak ray of sunlight” says Carsten Brzeski, ING’s chief economist. He further states that future trends of the automobile sector in China will impact the German trade.
The trade surplus has narrowed for the first six months of 2019 with domestic demand increasing and bringing in a rise in imports. The largest European economy is slowly showing growth in domestic sales.
The trade surplus has gone down to 109.9 billion Euros from previous levels of 122.4 billion Euros on a year-on-year basis. The current account surplus has fallen to 126.4 billion Euros down from 130.6 billion Euros, according to data from the Federal Statistics Office on Friday.