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German exports drop, trade surplus dips


German exports recorded a surprise fall in October for the second straight month while imports grew, narrowing the massive trade surplus of Europe’s biggest economy. But the decline is unlikely to silence critics.German imports outpaced exports in October, slightly narrowing the EU nation’s oft-criticized massive trade surplus, preliminary data showed Friday.

Exports from Europe’s top economy slid 0.4 percent compared with September, while imports climbed by 1.8 percent, the Federal Statistical Office (Destatis) said in seasonally-adjusted figures.

The bigger demand for goods from abroad lowered Germany’s trade surplus from €21.8 billion ($25.6 billion) in September to €19.9 billion in October.

In unadjusted figures, exports rose 6.8 percent over October 2016 to €108 billion, while imports rose 8.3 percent to €89.1 billion.

“The German trade data has brought more evidence that the entire economy started the fourth quarter on a weaker footing,” said ING Bank economist Carsten Brzeski. But he saw no reason to worry.

“Behind the vacation and weather driven white noise of monthly data, however, there is a clear upward trend,” he said, noting that exports remained a strong driver of growth in Germany.

Higher demand

October imports were driven higher by brisk appetite for goods made within the European Union, particularly outside the eurozone, Destatis noted. The feeling was mutual, with demand for “made in Germany” goods led by EU countries.

Earlier this week, figures released by the Economics Ministry showed industrial production contracted by 1.4 percent in October after a set of public holidays encouraged workers to take extended weekends.

However, monthly industrial order books grew by 0.5 percent in October after increasing by an upwardly revised 1.2 percent in September, thanks to solid demand from outside the eurozone, the ministry said.

October’s uptick in imports is unlikely, however, to silence critics of Germany’s massive trade surplus, the world’s largest which swelled to around €250 billion last year.

The United States, the International Monetary Fund and European peers regularly urge Germany to invest more to push up consumption and allow other countries to benefit indirectly from its success.

sri/aos (AFP, AP, dpa)

Topics: German exports

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