German exports in fastest decline since global crisis

German exports plunged in August by their largest amount since the height of the global financial crisis and leading institutes cut 2015 growth forecasts in the latest sign that an emerging market slowdown is hurting Europe’s largest economy.

The institutes stuck to their forecast for 1.8% growth next year, however, saying private consumption, boosted by low unemployment, strong wage gains and a positive impact from refugees, would offset the weaker export momentum.

A stream of negative headlines, from weak industrial orders and output data to Volkswagen’s emissions scandal and Deutsche Bank warning of a €6bn pre-tax loss in the third quarter have raised the risks of disappointing third quarter growth.

“Given the recent spate of poor August data, the latest trade numbers are not such a big surprise and remain consistent with our view that Germany is facing significant headwinds from weakening global demand,” said Philippe Gudin of Barclays.

Seasonally adjusted exports dived 5.2% to €97.7bn month-on-month, the steepest drop since January 2009, data from the Federal Statistics Office showed.

Imports fell 3.1% to €78.2bn, the biggest one-month decline since November 2012. Germany’s trade surplus narrowed to €19.6bn. Economists polled by Reuters had been expecting much smaller declines in exports and imports of 1.2% apiece and a trade surplus of €22.5bn.

Although the weak trade numbers were partly due to an unusually large number of holidays falling in August, waning demand from abroad, particularly China and other emerging markets, is beginning to leave its mark.

The German economy has posted four quarters of growth in a row since a mild contraction in the second quarter of 2014, expanding by 0.4% in April-June.