2010.09.0806:35:00UTC+00German Exports Slow In July

Germany's exports rose at a slower pace in July compared to June, while imports also decreased, official figures showed on Wednesday. The data suggests a slowdown in GDP growth from the record pace in the second quarter.

Statistical office Destatis said exports increased 18.7% from a year earlier, markedly slower than the 28.4% rise in the prior month. Imports growth also slowed to 24.9% from 31.4%.

A trade surplus of EUR 13.5 billion was recorded, slightly higher than expectations for a EUR 13 billion surplus. A surplus of EUR 14.2 billion was recorded in June.

Exports to the European Union increased 14.6% in July, while imports from the region climbed 21.8%. Exports to countries outside the European Union was up 25.1% and imports from those countries jumped 30.8%.

On a month-over-month basis, total exports declined by 1.5% and imports by 2.2%.

Analysts shrugged off the slightly dissapointing numbers, pointing out that a moderation was inevitable following surging growth in the second quarter.

"After the strong growth in the second quarter, German exports are now normalizing," ING's Carsten Brzeski said. "However, normalizing does not mean stagnation. Even at a slower pace, the export sector should remain an important growth driver."

Commerzbank said German exports will slow moving forward, with demand softening in Asia. "Foreign trade is unlikely to be able to sustain the high momentum of past months. We expect only moderate growth rates for exports in the coming months," it said.

Meanwhile, Germany's current account balance, which is the broadest measure of trade, showed a surplus of EUR 9 billion in July, smaller than expectations for a EUR 11.5 billion surplus. Exports have been the main driver of Germany's recovery from the global downturn, boosted by the sharp fall in the value of the euro in the wake of the European sovereign debt crisis earlier in the year. A weak euro makes European exports more competitive in global markets.

Europe's largest economy expanded an impressive 2.2% between April and June, speeding past the growth rates of other major economies in the region such as the U.K. (1.2%), France (0.6%) and Spain (0.2%).

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