| Consensus | Consensus Range | Actual | Previous | Revised | |
|---|---|---|---|---|---|
| Balance | €21.0B | €21.0B to €21.5B | €16.0B | €20.7B | €20.7B |
| Imports - M/M | 1.2% | 2.1% | 1.6% | ||
| Imports - Y/Y | 7.5% | 1.9% | 2.5% | ||
| Exports - M/M | -2.5% | 2.9% | 2.5% | ||
| Exports - Y/Y | -1.4% | -0.2% | 0.4% |
Highlights
Germany's trade performance in January 2025 signals a shift in economic momentum. Exports contracted by 2.5 percent from the previous month, while imports increased by 1.2 percent. This reversal in trade dynamics resulted in a shrinking trade surplus of 16.0 billion euros, down from 20.7 billion euros in December 2024 and 25.3 billion euros a year earlier.
A key observation is the divergence in trade with EU and non-EU markets. Exports to the EU dropped significantly by 4.2 percent, driven by weaker demand from eurozone economies (minus 5.0 percent). In contrast, trade with non-EU markets showed resilience, with imports from third countries increasing by 3.7 percent, despite a minor export decline of 0.4 percent.
Among Germany's major trade partners, exports to the United States fell sharply (minus 4.2 percent), indicating weaker transatlantic demand. However, the UK market showed a rare bright spot, with exports rising 1.7 percent, despite Brexit-induced trade frictions. Meanwhile, China remained Germany's largest import source, though imports fell 2.8 percent, suggesting possible supply chain shifts. The most striking contrast lies in Russian trade flows, with exports rebounding by 7.2 percent month-over-month, yet remaining 9.3 percent lower year-over-year. Meanwhile, imports from Russia plummeted by 37.7 percent annually, underscoring Germany's continued decoupling from Russian energy and goods.
With exports under pressure and imports surging, Germany's foreign trade balance is narrowing, reflecting global demand uncertainties and shifting supply dynamics. The latest update takes the German RPI to minus 10 and the RPI-P to minus 11, meaning that economic activities are slightly behind market expectations of the German economy.
A key observation is the divergence in trade with EU and non-EU markets. Exports to the EU dropped significantly by 4.2 percent, driven by weaker demand from eurozone economies (minus 5.0 percent). In contrast, trade with non-EU markets showed resilience, with imports from third countries increasing by 3.7 percent, despite a minor export decline of 0.4 percent.
Among Germany's major trade partners, exports to the United States fell sharply (minus 4.2 percent), indicating weaker transatlantic demand. However, the UK market showed a rare bright spot, with exports rising 1.7 percent, despite Brexit-induced trade frictions. Meanwhile, China remained Germany's largest import source, though imports fell 2.8 percent, suggesting possible supply chain shifts. The most striking contrast lies in Russian trade flows, with exports rebounding by 7.2 percent month-over-month, yet remaining 9.3 percent lower year-over-year. Meanwhile, imports from Russia plummeted by 37.7 percent annually, underscoring Germany's continued decoupling from Russian energy and goods.
With exports under pressure and imports surging, Germany's foreign trade balance is narrowing, reflecting global demand uncertainties and shifting supply dynamics. The latest update takes the German RPI to minus 10 and the RPI-P to minus 11, meaning that economic activities are slightly behind market expectations of the German economy.
Market Consensus Before Announcement
The surplus is seen nearly flat at E21.0 billion in January versus E20.7 billion in December.
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.
