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German exports plunge in May

economy

German exports plunge in May

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There was an unexpected fall in exports from Germany in May, another indicator of a slowing economy.

The export decline of 1.8 percent compared to April, was the steepest in nine months. Year-on-year exports were up by 1.6 percent.

Imports also rose less than expected; they were up just 0.1 percent, pointing to subdued domestic demand in Germany

These are further signs that weak global demand for German products is hitting growth in Europe’s largest economy.

Underscoring that, German exports to the rest of the eurozone went up compared to May last year.

“German export development is sluggish so far this year,” DIHK foreign trade director Volker Treier said. Trade with European Union countries was the only reason unadjusted exports rose 1.6 percent on the year in May, he said.

“Outside the EU, there is hardly any growth potential due to global crises and low oil prices.”

The slump in exports and the slight rise in imports means the seasonally-adjusted trade balance narrowed. It was 22.1 billion euros in May down from April’s 24.1 billion euros.

The disappointing trade figures come just days after the release of stats showing German industrial output posted its biggest monthly drop in nearly two years. In addition industrial orders were weaker than expected.

Germany’s economy grew by 0.7 percent in the first quarter of 2016, its strongest quarterly rate in two years. Soaring private consumption, higher construction investment and state spending on refugees more than offset a dip in trade.

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