| Consensus | Actual | Previous | Revised | |
|---|---|---|---|---|
| Balance | €17.5B | €22.2B | €20.4B | €20.8B |
| Imports - M/M | -6.7% | 1.9% | 1.5% | |
| Imports - Y/Y | -16.2% | -12.1% | -12.4% | |
| Exports - M/M | -4.6% | 3.7% | 3.5% | |
| Exports - Y/Y | -10.7% | -4.9% | -4.8% |
Highlights
The seasonally adjusted merchandise trade balance recorded a €22.2 billion surplus in December, up from November's marginally larger revised €20.8 billion. This was easily its best performance in 2023. Unadjusted, the surplus stood at €16.6 billion, a marked increase on the €16.6 billion posted a year ago.
However, the headline improvement was only attributable to imports falling more sharply than exports. Hence, the former dropped fully 6.7 percent on the month, the sixth decrease since last May and the steepest since December 2022. Exports declined 4.6 percent, their third loss in the last four months. Unadjusted annual export growth now stands at minus 10.7 percent while imports are down some 16.2 percent on the year.
December's increase in the black ink leaves a rising trend in the surplus but with exports clearly struggling, foreign demand is providing little help to German economic growth.
However, the headline improvement was only attributable to imports falling more sharply than exports. Hence, the former dropped fully 6.7 percent on the month, the sixth decrease since last May and the steepest since December 2022. Exports declined 4.6 percent, their third loss in the last four months. Unadjusted annual export growth now stands at minus 10.7 percent while imports are down some 16.2 percent on the year.
December's increase in the black ink leaves a rising trend in the surplus but with exports clearly struggling, foreign demand is providing little help to German economic growth.
Market Consensus Before Announcement
December's goods balance is expected to narrow to a €17.5 billion surplus versus a surplus of €20.4 billion in November.
Definition
The merchandise trade balance measures the difference between imports and exports of goods. The level of the international trade balance, as well as changes in exports and imports, indicate trends in foreign trade and can offer a guide to an economy's competitiveness.
Description
Changes in the level of imports and exports, along with the difference between the two (the trade balance) are a valuable gauge of economic trends here and abroad. While these trade figures can directly impact all financial markets, they primarily affect currency values in foreign exchange markets.
Imports indicate demand for foreign goods and services in Germany. Exports show the demand for German goods in countries overseas. Given the size of the German economy, the euro can be sensitive to changes in the trade balance. The bond market is also sensitive to the risk of importing inflation. This report gives a breakdown of trade with major countries as well, so it can be instructive for investors who are interested in diversifying globally. For example, a trend of accelerating exports to a particular country might signal economic strength and investment opportunities in that country.
Imports indicate demand for foreign goods and services in Germany. Exports show the demand for German goods in countries overseas. Given the size of the German economy, the euro can be sensitive to changes in the trade balance. The bond market is also sensitive to the risk of importing inflation. This report gives a breakdown of trade with major countries as well, so it can be instructive for investors who are interested in diversifying globally. For example, a trend of accelerating exports to a particular country might signal economic strength and investment opportunities in that country.
