Figures from the country’s statistics office showed that a rise in the value of imports and a modest decline in exports pushed Europe’s biggest economy into a trade deficit of €1bn (£860m) in May. The monthly deficit was the country’s first since the year after German reunification, according to Bloomberg. Exports in May fell 0.5% from the previous month to 125.8 billion euros, while imports rose 2.7% to 126.7 billion euros, more than economists had expected city. Compared to the same month last year, exports increased by almost 12%, while the value of imports increased by almost 30%. Germany’s dominant manufacturing base has been disrupted by global supply chain problems caused by the pandemic and lockdowns in China. Rising energy prices and weaker demand for goods are also weighing on demand. Data released on Friday showed that manufacturing output across the euro zone fell in June for the first time since the depths of the initial lockdowns in 2020, in a sign of worsening economic conditions in the single currency bloc. According to the latest trade data, prices for imports such as energy, food and industrial components rose more than 30 percent in May from a year ago, while export prices rose at about half the rate. The figures come as Russia’s war in Ukraine is driving up energy prices across Europe, raising inflation and affecting the trade balance of countries that depend on oil and gas imports for much of their energy needs. The UK’s current account deficit, which measures cross-border trade and financial flows, widened in the first quarter of this year to the highest level since records began in the 1950s. of fuel imports, also comes as many British exporters struggle with Brexit disruption from border problems and red tape. By contrast, Russia’s current account surplus more than tripled in the first four months of the year, reaching its highest level since at least 1994. The increase was driven by rising gas prices that lifted the value of exports and Western sanctions that led to drop in imports. Subscribe to the Business Today daily email or follow Guardian Business on Twitter @BusinessDesk German exports to Russia fell by almost 60% in March after the invasion of Ukraine and fell again by almost 10% in April. Exports rebounded on a monthly basis for the first time in May, rising almost 30% to €1 billion. German imports from Russia fell by 9.8% to 3.3 billion euros. Claus Vistesen, chief eurozone economist at consultancy Pantheon Macroeconomics, said a sharp slowdown in Russian gas supplies to Germany would limit the volume of imports, but that the value would rise as the overall cost of energy rises. “Germany’s trade surplus has now evaporated, mainly thanks to rising imports, offsetting the otherwise decent momentum in exports,” he said. “Looking ahead, we suspect that the external balance will remain in deficit in the summer.”
