German Trade Balance Swells to 24.9 Billion Euros in June

Official figures have revealed that Germany’s trade balance in June increased to 24.9 billion euros, after exports rose by 1.2% outstripping the volume of imports, which increased by 0.3%, for the corresponding month a year ago the trade excess was 23.9 billion euros.

Overall Germany’s volume of exports reached the value of 106.8 billion euros, while imported goods totalled 82 billion euros, the breakdown of the avenues of trade showed that there was 62.7 billion euros exported to other member states of the European Union (EU), while they imported goods which amounted to 55.2 billion euros.

When comparing June this year to the same month a year ago, EU exports hiked by 2.3%, and imports from the countries increased by 3.3%.

In the euro area, the most powerful economy in the currency bloc dispatched 38.9 billion euros to their 18 other partners in the zone in June, while the value of the goods received from those countries was 38 billion euros, an increase of 3%.

During June, goods spiralling up to 23.8 billion euros were exported to other EU countries not belonging to the euro area , an increase of 6%, while the value of the goods imported from those countries was 17.2 billion euros, a rise of 3.9%, further boosting the trade balance for Germany.

Exports of goods to countries outside the European Union amounted to 44.1 billion euros in June , while imports from those countries totalled 26.8 billion euro, in comparison to June last year, exports to so called ‘third’ countries decreased by 0.4% and imports from those countries by 5.4%.

All eyes will now be on Friday’s GDP announcement for the German economy in the second quarter of this year, where analysts are expecting a fall in productivity, with some experts predicting a slower expansion of 0.2% from the 0.7% growth that was recorded for the first three months of the year.

Yesterday’s 0.8% rise in industrial production, even though it was a stronger performance than anticipated by many, is not thought to be enough to rescue Germany from disappointing economic figures.

The impact of ‘Brexit’ may also be felt by the German economy, as confidence might have dipped now that there are uncertainties in several sectors where there is close trade collaboration with the UK, such as in the automotive industry, additionally there are thousands of companies in Germany which are currently active in the UK, and are now facing a different regulatory trade framework with the UK in light of ‘Brexit’.

Additionally, UK trade balance for June increased to 12.4 from 11.5 in the previous month.The deficit was much higher than expectations of £10.5bn and the data will reinforce further concerns over Britain’s economy.

So far today CET, the euro has reacted well to the trade surplus news, leaping up to buying $1.1088, up from this morning’s EUR/USD nadir of $1.107, the euro has traded narrowly against major currency pairs over the past 24 hours, and after the healthy US employment figures released at the end of last week, where 255,000 jobs were created in July, the euro will be happy to steady itself against the greenback.