BERLIN (Reuters) - German exports and imports hit record highs in value terms in July, suggesting foreign appetite for goods from Europe’s largest economy remains robust despite a slowdown in China, while domestic demand is also holding up well.
Seasonally adjusted exports climbed by 2.4 percent on the month to 103.4 billion euros while imports grew 2.2 percent to 80.6 billion euros. Those were the highest values since records began in 1991, Federal Statistics Office data showed on Tuesday.
Both figures were far stronger than forecast. Economists polled by Reuters had been expecting shipments abroad to rise by 0.7 percent and imports to increase by 0.5 percent.
Nonetheless, economists warned that caution was warranted.
“The start to the second half of the year looks excellent but there are a lot of question marks over the future. In August the turbulence in many emerging market currencies and on the Chinese stock markets started,” said Stefan Schilbe, economist at HSBC Trinkhaus.
“German exports will not continue to grow at this pace as a result. That’s what leading indicators suggest, for example. The export sector will fare worse in the coming months,” he added.
An unadjusted breakdown showed shipments to countries within the euro zone increased by 5.5 percent in July compared with a year ago while exports to countries within the European Union that do not use the euro climbed by 6.9 percent. Demand for German goods beyond the EU rose by 6.4 percent.
Stefan Kipar, economist at BayernLB said strong trade with the United States, Britain and the whole euro zone was more than offsetting weakness in emerging markets and China. He said foreign trade and domestic demand would likely provide impetus in the third quarter.
German growth slowed in early 2015 but picked up slightly to 0.4 percent in the second quarter thanks to foreign trade, which has traditionally propelled the economy, although private consumption has been the key growth driver in the last two years.
Nonetheless, China is a risk for Germany, which has the greatest exposure to the Asian nation of all EU members. The Ifo institute has warned that exports may falter later this year if China’s slowdown hits the economy.
But the BGA trade association has said Germany will set another export record this year despite recent worries about China, while Daimler (DAIGn.DE) said last week that deliveries of its Mercedes-Benz to China climbed 53.1 percent in August.
Reporting by Michelle Martin, Rene Wagner and Klaus Lauer; Editing by Caroline Copley and Hugh Lawson