Rolling coverage of the latest economic and financial news, as Germany’s trade gap widens
German exports have staged “a first comeback” by jumping 9% in May, says Carsten Brzeski of ING, but there’s plenty more room for improvement.
Looking ahead, while April was the worst month ever in terms of most economic data releases, the month of May has been one of the best months ever.
However, it will need a couple of these ‘best month evers’ to bring the economy back to its pre-crisis level. Particularily the divergence between domestic and external demand is remarkable.
The different degrees of lockdowns across eurozone countries are also reflected in German export data, with exports to France, Italy and Spain dropping more significantly in April than to most other trade partners. Interestingly, the share of exports to China increased to the highest level ever.
German trade data showed exports and imports growing. Services have been hit more than manufacturing by the virus, so trade should outperform the economy for now.
German exports rose 9% m/m in May, in line with manuf. orders & output, but the level remains well below that of imports in a sign of a (relative) resilience in domestic demand, lingering supply-chain disruptions & weak global demand. Overnight stays were still down ~75% in May pic.twitter.com/otfM9LX4LE
Today’s trade figures also show that German companies only sold half as much to British counterparts as usual in May, compared with a year earlier.
The degree to which year-on-year exports were affected depended on the trading partner. Exports to the People’s Republic of China decreased rather moderately by 12.3% to €7.2bn euros in May 2020 compared with May 2019.
Exports to the United States, which have been hit particularly hard by the coronavirus pandemic, dropped by 36.5% to €6.5bn. Compared with the same month last year, exports to the United Kingdom showed a particularly strong decrease, by 46.9% to €3.5bn.
In May 2020, most imports came to Germany from the People’s Republic of China. Goods to the value of €10.7bn were imported from there, which was 23.4% more than in May 2019. Imports from the United States fell by 26.9% to €4.4bn in May 2020. German imports from the United Kingdom were down by 20.3% to €2.2b euros.
Read more: theguardian.com