BERLIN: German exports rose less than hoped in August as foreign industry orders fell, adding to signs that domestic demand rather than trade activity will drive modest growth in Europe’s leading economy this year.
Sales of goods and services abroad gained just one percent, Federal Statistics Office data showed yesterday, prompting a German trade group to slash its forecast for full-year export growth. “We can’t achieve three percent growth anymore. We now expect ... growth of less than one percent,” Anton Boerner, the president of the BGA trade association, said, citing weakness in a slew of foreign markets.
Exports have been the cornerstone of the German economy in recent decades.
But yesterday’s news strengthened expectations that domestic demand, rather than trade, will drive growth this year, helped by a strong labour market, solid wage hikes and favourable financing conditions — good news for Germany’s euro zone neighbours.
That picture was reinforced by economy ministry data showing industrial orders dipped 0.3 percent in August from July, also weaker than expected and driven by a 2.1 percent fall in foreign orders while domestic orders rose 2.2 percent.