German Exports Decline More Than Expected in May

German exports fell more than expected in May, down 1.4% from the previous month, according to the Federal Statistical Office. Economists had forecast a 0.2% decline. Importations also decreased by 3.8% in May after a 2.2% increase in April, exceeding the predicted -0.9%.

German exports fell more than expected in May, down 1.4% from the previous month, according to the Federal Statistical Office. Economists had forecast a 0.2% decline. Importations also decreased by 3.8% in May after a 2.2% increase in April, exceeding the predicted -0.9% [1].

The foreign trade balance showed a surplus of 18.4 billion euros ($21.60 billion) in May, up from 15.7 billion euros in April. Exports to EU countries dropped by 2.2% on the month, while exports of goods to countries outside the EU declined by 0.3%. Exports of goods to the United States decreased by 7.7% compared with April, while exports to China fell by 2.9% [1].

The decline in exports was partly attributed to decreased demand from the United States following months of strong purchases in anticipation of U.S. tariffs. The better-than-expected German industrial production figures for May also indicate that output in other sectors is proving more resilient to tariffs than initially expected [2].

Despite the decline in exports, sentiment in Germany's crucial chemical sector has improved significantly, with the ifo Institute's index for the business climate in the chemical industry climbing to -8.9 points in June, up from -16.2 points in May. The business expectations indicator soared from -5.4 points to 9.5 points, the highest figure in over 3 years [3].

The new German government has agreed on a stimulus package for businesses, which is providing urgently needed impetus. The planned reduction in electricity tax for industry, announced by Finance Minister Lars Klingbeil, is expected to give the energy-intensive chemical sector substantial relief [3].

References:
[1] https://www.investing.com/news/economy-news/german-exports-fall-more-than-expected-in-may-4125651
[2] https://www.capitaleconomics.com/publications/europe-rapid-response/german-industrial-production-may-0
[3] https://finance.yahoo.com/news/business-sentiment-german-chemical-sector-091526335.html