German exports rise again in June

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BERLIN, Aug. 7 (Xinhua) -- German exports rose again in June, according to official figures published on Tuesday by the Federal Statistical Office.

According to the Wiesbaden-based government agency, German companies sold goods worth 115.5 billion euros (134 billion U.S. dollars) in total to foreign customers during the month, marking a 7.8 percent increase compared to June 2017 on seasonally-adjusted basis.

At the same time, imports also grew by an annual rate of 10.2 percent to 93.7 billion euros and hence still provided more tentative evidence of a gradual shift in Germany towards lower overall trade surpluses.

Berlin has repeatedly been chastised by U.S. President Donald Trump, as well as the Washington-based International Monetary Fund (IMF) for allegedly contributing to global imbalances with its narrowly export-driven growth model.

The IMF believes that permanent current account surpluses (the balance of a country's international trade and investment inflows and outflows, note) above six percent of gross domestic product (GDP) endanger economic stability because they imply corresponding deficits and a build-up of international liabilities in other countries.

The Federal Statistical Office emphasized that the volume of imports in June was the highest recorded by the government statisticians since the beginning of trade measurements in 1950.

As a consequence, Germany's monthly trade surplus dipped slightly from 22.1 billion euros in 2017 to 21.8 billion euros in 2018.

A more comprehensive assessment including trade in goods (plus 24.0 billion euros including further amendments), services (minus 1.7 billion euros) and investment income (plus 6.8 billion euros) by the German Central Bank (Bundesbank) indicated a positive current account balance of 26.2 billion euros for Germany in April 2018. Back in April 2017 the Bundesbank measured a surplus of 22.4 billion euros.

Broken down by region, Germany's foreign trade partners continued to be concentrated within the European Union (EU). The country exported goods 67.7 billion euros (plus 5.9 percent) to other members of the bloc in June 2018 while receiving imports worth 53.8 billion euros (plus 10.1 percent).

The eurozone hereby accounted for the bulk of exports (43.0 billion euros, plus 7.6 percent) and imports (35.0 billion, plus 10.1 percent). During the same period, non-EU countries received 47.9 billion euros (plus 10.5 percent) of German goods and were the source of 40.0 billion euros (plus 10.3 percent) of monthly imports.

Speaking to Xinhua on Tuesday, Reint E. Gropp, president of the Halle Institute for Economic Research (IWH), noted that in spite of the declining overall trade surplus, Germany continued to export more than it imported from its most important trading partners.

"There continues to be a strong case for expansionary fiscal policy (increases in investment and education) combined with personal income tax cuts. Germany is doing itself no favor with its tight fiscal policy at the moment, both politically within the EU and with the US, as well as economically," Gropp argued.

Gropp further highlighted that the official data so far appeared to showcase no visible impact of protectionist policies recently adopted by U.S. president Donald Trump.

"What one may expect to see is a surge in exports and imports before tariffs take effect," the IW president predicted.

Strong annual and monthly growth in German exports to China so far in 2018 could hence be interpreted as "evidence that German manufacturers are looking increasingly for new markets to replace the more difficult and highly uncertain situation with the U.S."

Looking forward, Gropp expressed concern that the vague agreement struck between EU Commission President Jean-Claude Juncker and Trump to temporarily stall the protectionist spiral entered by the two blocs would not be sufficient to shield German exporters from tariff-related losses.

"At the present the agreement is vague and most would expect that U.S. tariffs on European goods may still be on the table. I expect this uncertainty to increase trade between the U.S. and Europe in the short run, with a strong decline later in the year," he said. Enditem

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