German trade surplus swells in October

[FRANKFURT] Germany's closely-watched trade surplus expanded in October, as exports defied global tensions with a surprise increase, official data showed Monday.

Goods sold abroad outweighed imports by 20.6 billion euros (S$31 billion), federal statistics authority Destatis said in seasonally-adjusted figures.

Exports grew 1.2 per cent month-on-month, to 119.5 billion euros, while imports were roughly flat at 98 billion.

The trade surplus boost stands in stark contrast to the 1.7-per cent month-on-month fall in industrial production in October.

Meanwhile international trade tensions between Washington and Beijing, US President Donald Trump's threats of tariffs against EU goods and Brexit have all been weighing on cross-border business.

Looking in more detail at the figures, 70 billion euros of German exports went to the EU, roughly flat year-on-year, while third-country exports grew 4.6 per cent to 49.5 billion.

Meanwhile both EU and non-EU imports fell compared with a year ago.

ING bank economist Carsten Brzeski noted that "German exports have held up surprisingly well in recent months," but warned that "the ongoing drought in order books is a strong argument against optimism."

"With disappointing consumption and industrial data but encouraging trade data, the economy will remain on a windy road between contraction, stagnation and meagre growth," he added.

In the near term, a second quarter of negative growth for 2019 appears less likely in October-December than many economists feared, after Germany narrowly escaped a technical recession - two successive quarters of shrinkage - in July-September.

AFP