Exports from Germany fell sharply in February marking the biggest monthly decline since 2015 as the trade surplus narrowed. Official data released on Monday showed that growth in Europe’s largest economy might have slowed towards the end of the first quarter.
On a seasonally adjusted basis, German exports fell 3.2% on a month over month basis. This was the biggest monthly decline since August 2015. Imports were also weaker, falling 1.3% on the month. The data missed forecasts where economists hoped that German exports edged higher by 0.2% on the month while forecasting a 0.3% increase in imports.
The stronger exchange rate of the common currency alongside uncertainty among businesses regarding the global trade environment was seen as one of the likely causes for weaker exports.
On a seasonally adjusted basis, trade surplus narrowed to 19.2 billion euro in February compared to 21.5 billion euro in January. This was the lowest since January 2017 and the data misses estimates of 21.4 billion euro.
The wider current account surplus which accounts for the flow of goods, services and investments were seen rising to 20.7 billion euro in February compared to January’s 20.3 billion.
The weaker than expected trade data suggested that the German economy was cooling. Previously, the German industrial production data showed a sharp decline since two years.
It comes at a time when global economic conditions did not change. However, the protectionist threats from President Donald Trump might have dampened exports according to some experts.
The ongoing tussle between the U.S. and China is expected to put Germany in the cross fire which is seen as a big concern among investors.
Various EU leaders have lined up meetings with President Trump this week. This includes the French President Macron and Germany’s Angela Merkel. The meeting comes just before the expiration of the EU’s exception on import duties on steel and aluminum.
Previously, after announcing the tariffs on steel and aluminum, President Trump invited the allies of the U.S. to negotiate on the tariffs imposed. The offer was quickly taken up some countries including Australia.
Eurozone Sentix investor confidence weakens
In a separate report, Sentix released the monthly investor confidence survey results. According to the report, investor confidence in the Eurozone declined sharply in April. Most of the declines came on account of uncertainty from the fears of a trade war.
The Eurozone investor sentiment index was seen falling to 19.6 in April, down from 24.0 in March. Economists forecast that the investor confidence to be unchanged during the month. The decline in April marks a third consecutive month of decline among investors.
The current situation index was seen at 43.0 compared to 45.8 a month ago. Despite the decline, the current situation index was seen as being rate excellent, according to Sentix.
The German investor confidence also weakened as it fell to 24.4 in April compared to 29.1 in March. Various other economic indicators for the month of February and March had also signaled a broadly unchanged reading signaling that the pace of growth might have eased.
The Eurozone posted one of the fastest rate of GDP growth in 2017. Economic activity in the Eurozone rose 2.7% on the quarter ending December 2017 while the yearly annual GDP growth was recorded at 2.3%.
Various sources, including the Eurostat estimate that growth will average around the current levels if not slightly weaker for 2018 and 2019.
Consumer prices, which are another key set of indicators is also expected to remain below the ECB’s 2% inflation target rate at least until 2019.