We have suggested here in the past that Q3 is going to see slower growth both domestically in Germany and on the global scale than we saw in Q2. The first confirmation arrived today as German exports slipped in July, suggesting that the recovery both in the euro-region and around the world is losing momentum. According to the Federal Statistics Office in Wiesbaden sales abroad (exports) contracted 1.5% from June when they expanded by 3.7%. The trade balance wasn’t badly effected sicne imports contracted by 2.2% keeping the balance at 13.5 billion euros in July only a little weaker than June’s 14.2 billion.
While contracting imports protected Germany’s ‘bottom-line’ we fear that these are ominous signals for the time to come. Germany has been driving growth across the EMU, a slowdown in growth in Germany could spell problems from the euro-area.
Written by Jonathan Granby, DailyFX Research Team
If you wish to contact the author with comments or questions email jgranby@fxcm.com
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