BERLIN, Aug 11 - Germany's trade surplus with the rest of the world widened in June to 10.4 billion euros from 10.2 billion euros in May, as both exports and imports fell amid weak foreign and domestic demand, data showed on Monday. Federal Statistics Office data showed exports totalled 54.1 billion euros, while imports amounted to 43.7 billion euros. Adjusted for seasonal factors, exports fell 2.5 percent month on month, while imports fell 1.0 percent month on month. The figure compared with the consensus forecast in a poll for a trade surplus of 10.1 billion euros .
Economists said the data showed the recent strength of the euro was hurting exports, and said they expected foreign orders to remain weak in the coming months as the global economy struggles to get moving again. Germany's export-oriented economy has been hammered by the strong euro which makes German goods more expensive abroad, and exports are not seen providing much impetus to growth this year. "The decline in exports was due to the lame global economy, while the euro's strength over the last six months is making conditions more difficult for German companies," said Ulrike Kastens, an economist at Sal. Oppenheim. Kastens said that although a modest global economic upturn was expected in the second half of this year, it would not give a significant boost to exports.
With Europe's biggest economy on the verge of a recession, a decline in exports is unwelcome news as foreign sales have proved the sole pillar of growth in the German economy in recent years. Preliminary gross domestic product data on Thursday is expected to show the economy shrank by 0.1 percent in the second quarter, according to a poll. The data showed total exports were down 4.1 percent year-on-year, while exports to non-euro zone countries in June were 6.6 percent lower year-on-year and exports to countries outside the European Union were 2.4 percent lower on the year. Imports to Germany fell a total 3.6 percent from June 2002, reflecting continuing weak domestic demand. Imports from non-euro zone countries were 11.6 percent lower on the year, while imports from outside the European Union were down 1.6 percent. June's trade surplus was lower than a surplus of 11.1 billion euros recorded in June 2002. In the January to June period as a whole, the surplus narrowed to 59.1 billion euros from 63.4 billion euros in the same year-earlier period.
Germany's current account balance, the broadest measure of trade which also includes flows in services and investments, had a surplus of 2.7 billion euros in June, down from 3.0 billion euros in May, slightly above analysts' forecasts for a surplus of 2.6 billion euros.//