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Germany’s export machine is sputtering at an awkward moment for Angela Merkel

Germany
Jason Karaian
By Jason Karaian

Global finance and economics editor

Germany’s trade performance was surprisingly weak in July, according to data released today. Exports fell by 1.1% compared with a year ago; analysts expected a small rise.

Sales of goods to the rest of the euro zone were weak, which is no surprise. But a 1% drop in exports to countries outside of the EU is a more worrying result, suggesting that German goods are falling out of favor in faster-growing markets. Coupled with a rise in imports, Germany’s seasonally-adjusted trade surplus fell to €14.5 billion ($19 billion), its lowest level in nearly a year and a half.

With elections just over two weeks away, the timing could hardly be worse for chancellor Angela Merkel. Her CDU/CSU coalition leads in the polls, and the only televised debate between Merkel and her main challenger, Peer Steinbrück of the Social Democrats, was judged a draw on Sept. 2. But the route to forming a government in Germany is far from straightforward, so small shifts in sentiment can have a big impact on the final result.

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