Germany’s imports rose by 31.7% in June year-on-year, marking the highest value reported since trade recordings began in 1950, according to the Federal Statistical Office.
Provisional data published this week shows that Germany’s imports rose to €72.4 billion in June. Exports rose by 28.5% to €86.5 billion —the highest absolute export value of a month reported since October 2008.
The German Chambers of Industry and Commerce expects Germany’s imports to rise by 10% in both 2010 and 2011 while the rise of exports is estimated at 11% and 8% respectively.
Axel Nitschke, the head of foreign trade, says even though German exports are to grow significantly, it is unlikely that Germany will regain its status as the world’s largest exporter from China, the current holder. If anything, Nitschke says China will extend its advance.
Yet Germany continues to run a large trade surplus while domestic spending remains relatively weak
The recent rise in imports has fuelled hopes that the recovery is starting to benefit the rest of the world and Germany is starting to rebalance away from exports towards domestic consumption.
Yet Germany continues to run a large trade surplus while domestic spending remains relatively weak. In June, its foreign trade balance showed a surplus of €14.1 billion, up from €12.3 billion in the same month last year.
Jennifer McKeown, a senior European economist at Capital Economics, says the recent surge in imports is not a sign Germany has started to rebalance its economy. (article continues below)
“While Germany’s recent performance is encouraging, it seems unlikely to prompt a strong and sustained recovery throughout the eurozone or significantly reduce the risk of an eventual break-up,” she writes in her latest Capital Economics Update.
McKeown puts the rise in imports down to the rise in exports. As Germany has exported more, it has imported more for production.
Consumer confidence indicators in Germany have risen while unemployment has fallen, suggesting that domestic demand has yet to pick up.