German trade data disappointed today indicating that Europe’s powerhouse is starting to feel the effects of the euro zone sovereign debt crisis.
Exports from Germany recorded their biggest fall in half a year in October, pushing the trade surplus sharply lower signalling a weakening economy. The majority of Germany’s exports are within the euro zone, so with many indebted economies in the region, this is hampering key export markets for Germany.
Exports declined by 3.6 percent from a month earlier, their largest decline since April, compared with the poll forecast for a fall of 1 percent. Imports also shrank by their biggest amount in six months, dipping 1.0 percent compared with an expected 0.5 percent rise.
Germany’s Federal Statistics Office showed the seasonally-adjusted trade surplus shrinking to 12.6 billion euros from a revised 15.1 billion euros in the previous month. The forecast was for 14.3 billion.
While many analysts believe that Germany should still see economic expansion of 3 percent this year after a strong start to 2011, the government has nearly halved its forecast for 2012 growth to 1 percent. The German government is now relying on domestic demand to boost the economy.
After the data at 07:00 GMT, euro dipped against the dollar to 1.3280 from where it was before the news at 1.3304