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German Exports Fall Most In 22 Months

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German exports declined the most in nearly two years in June and imports logged the biggest contraction since 2009, lifting the trade surplus to a higher level.

Exports fell unexpectedly by 2.8 percent in June from May, when they climbed 1.5 percent, data from Destatis showed Tuesday. This was the biggest fall since August 2015, when shipments slid 5.4 percent.

At the same time, imports decreased 4.5 percent, in contrast to May's 1.3 percent increase.

Imports fell for the first time in four months, logging the sharpest contraction since January 2009. Both exports and imports were expected to gain 0.2 percent each in June.

As a result, the trade surplus increased to a seasonally adjusted EUR 21.2 billion from EUR 20.3 billion in May.

On a yearly basis, export growth plunged to 0.7 percent from 14.1 percent. Similarly, imports grew only 3.6 percent after expanding 16.3 percent.

The current account of the balance of payments showed a surplus of EUR 23.6 billion versus EUR 24 billion in the same period of previous year.

Elsewhere in the euro area, data from the French customs office showed Tuesday that the trade shortfall widened to EUR 4.66 billion from EUR 4.43 billion in May. The deficit was forecast to widen to EUR 5.05 billion.

Although German and French exporters struggled in June, the outlook for trade in both countries remains fairly bright amid strong growth in global demand, Jessica Hinds, an economist at Capital Economics, said.

The brighter outlook is also supported by the still low level of the euro exchange rate, despite its recent appreciation, the economist added.

Germany's second quarter GDP data is due on August 15. The economy had expanded 0.6 percent in the first quarter.

by RTT Staff Writer

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