BERLIN, Feb 8 (Reuters) - Germany's trade surplus last year fell for the first time since 2009, data showed on Thursday, in a further sign that vibrant domestic demand is sucking in more imports and slowly re-balancing the country's export-oriented economy.

Chancellor Angela Merkel has come in for criticism from U.S. President Donald Trump's administration for Berlin's large trade surplus with the United States, while scepticism towards free trade is mounting in some poorer euro zone countries.

International Monetary Fund chief Christine Lagarde has also urged Germany to increase domestic spending and boost imports, warning that the build-up of large current account surpluses in countries such as Germany is partly responsible for the rise of protectionism elsewhere.

"The improvement of the trade balance is driven by imports and not by exports," Dekabank analyst Andreas Scheuerle said. "This means we don't have to put on the brakes on exports. This is a win-win-situation."

In 2017, Germany's trade surplus went down to 244.9 billion euros ($300.86 billion) from its record-high of 248.9 billion euros reached in the previous year, according to data from the Federal Statistics Office. It was the first decline since 2009.

The wider current account surplus, which measures the flow of goods, services and investments, edged down to 257.1 billion euros from 259.3 billion euros in the previous year.

"This will please U.S. President Donald Trump for whom the German export surplus has always been a thorn in his side," Christiane von Berg from BayernLB said.

In December alone, seasonally adjusted exports rose by 0.3 percent on the month while imports rose by 1.4 percent, the data from the statistics office showed.

The exports figure beat expectations for a 1.0 percent fall while imports also came in stronger than the forecast for a 0.5 percent decrease.

The seasonally adjusted trade surplus in December narrowed to 21.4 billion euros. This was smaller than the Reuters consensus forecast for a surplus of 21.7 billion euros.

"The strong euro is hardly leaving a mark. Due to dynamic global trade, the euro appreciation is not posing an acute problem," Scheuerle said.

The German government expects the consumer-led upswing in Europe's largest economy to continue this year, forecasting 2.4 percent growth for 2018 after 2.2 percent in the previous year.

To secure a fourth term as chancellor, Merkel on Wednesday handed her Social Democrat coalition partners control of the finance ministry, giving them licence to spend a record budget surplus, and embracing their demands for European reform.

The agreed hike in additional state spending is likely to boost domestic demand even further and help to reduce the still large trade surplus also in the coming years. ($1 = 0.8140 euros) (Reporting by Michael Nienaber; Editing by Paul Carrel and Matthew Mpoke Bigg) </s> BERLIN (Reuters) - Germany’s trade surplus fell last year for the first time since 2009, data showed on Thursday - a further sign that vibrant domestic demand is sucking in more imports and slowly re-balancing the country’s export-oriented economy.

The European Commission and U.S. President Donald Trump have criticised Chancellor Angela Merkel for Germany’s large trade surplus, while scepticism towards free trade is mounting in some poorer euro zone countries.

International Monetary Fund chief Christine Lagarde has also urged Berlin to increase domestic spending and boost imports, warning that ballooning current account surpluses in countries such as Germany are partly responsible for the rise of protectionism elsewhere.

“The improvement of the trade balance is driven by imports and not by exports,” Dekabank analyst Andreas Scheuerle said. “This means we don’t have to put the brakes on exports. This is a win-win situation.”

In 2017, Germany’s trade surplus shrank to 244.9 billion euros ($300.9 billion) from its record high of 248.9 billion euros in the previous year, according to data from the Federal Statistics Office. It was the first decline since 2009.

The wider current account surplus, which measures the flow of goods, services and investments, edged down to 257.1 billion euros from 259.3 billion euros the previous year.

“This will please U.S. President Donald Trump, for whom the German export surplus has always been a thorn in his side,” said Christiane von Berg from BayernLB.

Exports rose by 6.3 percent in 2017 to a record high of 1.28 trillion euros, the data showed. But this was outpaced by an 8.3 percent increase in imports to 1.03 trillion euros, also an all-time high.

“Demand for German products clearly picked up on all continents. But we’re particularly pleased about the economic upturn in Europe,” said Holger Bingmann, head of the BGA trade association.

The recent appreciation of the euro has so far hardly affected German export flows, Bingmann added.

The German government expects the consumer-led upswing in Europe’s largest economy to continue this year, forecasting 2.4 percent growth for 2018 after 2.2 percent in the previous year.

To secure a fourth term as chancellor, Merkel on Wednesday handed her Social Democrat coalition partners control of the finance ministry, giving them licence to spend a record budget surplus, and embracing their demands for European reform.

The agreed hike in additional state spending is likely to boost domestic demand even further and help reduce the still-large trade surplus in coming years.

“It is an important signal that in the coalition government programme it has been agreed to strengthen investments in infrastructure and in vital technologies,” deputy economy minister Matthias Machnig, a Social Democrat, told Reuters.

A government report said last month import growth was expected to continue to outpace export growth in 2018.

In December alone, seasonally adjusted exports rose by 0.3 percent on the month while imports rose by 1.4 percent, the data from the statistics office showed.

A container ship is seen at the shipping terminal Eurokai in the Port of Hamburg, Germany November 6, 2017. REUTERS/Fabian Bimmer

The exports figure beat expectations of a 1.0 percent fall while imports also came in stronger than the forecast 0.5 percent decrease.

The seasonally adjusted trade surplus in December narrowed to 21.4 billion euros. This was smaller than the Reuters consensus forecast of a surplus of 21.7 billion euros.

($1 = 0.8140 euros) </s> Germany's trade surplus shrank for the first time since 2009 last year as imports outpaced exports in Europe's booming top economy, giving Berlin ammunition to ease criticism of its huge trade gap with other countries.

The country's trade surplus unexpectedly fell to 245 billion euros ($300 billion) from a record 249 billion in 2016, figures from federal statistics authority Destatis showed.

Germany routinely comes under fire over its massive trade surplus, with partners from Paris to Washington urging the government to address the chronic imbalance by doing more to encourage consumption at home, indirectly boosting other nations.

In what may go some way to silencing those complaints, Destatis said imports soared by 8.3 percent last year to an all-time high of 1.03 trillion euros.

It marks the first time German imports have breached the psychologically significant trillion-euro barrier, and comes as the economy is humming, wages are high and unemployment is lower than ever.

But Germany's exporters are also on a roll, benefiting from a robust global recovery.

Exports shot up 6.3 percent to 1.3 trillion euros last year -- another fresh record.

"It's the typical German success story when it comes to exports," analyst Carsten Brzeski of ING Diba bank told AFP.

The latest snapshot of the country's trade balance could make it easier for German policymakers to counter criticism of its massive surplus, he said.

"They can say: this is what you have been arguing for," said Brzeski.

But insatiable appetite for German goods abroad means the irritation is likely to persist.

"For the critics, the reduction is far too little," he said. "I expect the country will still have extremely high trade and current account surpluses in 2018."

The 2017 figures showed that German demand was strongest for goods made inside the European Union, but there was also a nine-percent jump in imports from the rest of the world, including the United States.

Most of Germany's goods sold abroad meanwhile were bought by fellow EU member states, accounting for some 750 billion euros, up 6.3 percent on 2016.

Looking ahead, observers say the recent strength of the euro may put the brakes on exports in coming months, as a stronger currency makes German goods more expensive abroad.

But Brzeski said exporters are unlikely to suffer much.

"German exports have always proven to be resistant to a strong euro," he said.

He added however that the euro's rise against the dollar in particular means Germany may "feel some negative impact" in its bilateral trade with the US.

US President Donald Trump has been among the most vocal opponents of Germany's surpluses, calling his country's trade deficit with Germany "unfair" and wondering aloud why there are so many German cars on American roads.

But he is far from alone.

European partners and global institutions like the International Monetary Fund have long urged the German government to spend and invest more to push up demand and boost growth in other regions.

German officials argue that the trade surplus reflects the strength of the "made in Germany" brand and insist there is little they can do to influence the spending of companies and individuals.

But those arguments have done little to stop the grumbling. Just last month, IMF chief Lagarde called on Berlin to relax its cherished budgetary discipline and help "reduce global imbalances".

Those pleas have perhaps not fallen on deaf ears.

The coalition pact unveiled by Chancellor Angela Merkel's would-be new government on Wednesday reaffirmed Berlin's commitment to a balanced budget, but also pledged billions of euros in extra spending on education, childcare and internet infrastructure.

Critics will also be cheered by rising salaries in Europe's powerhouse, with Destatis announcing that real earnings grew 0.8 percent in 2017.

The country's most powerful union IG Metall, which represents nearly four million workers, this week won a 4.3-percent pay increase from employers, setting the tone for similar wage hikes in other industries. </s> BERLIN, Feb 8 (Reuters) - Germany’s trade surplus fell in 2017 for the first time in eight years, data showed on Thursday, in a further sign that vibrant domestic demand is sucking in more imports and slowly re-balancing the country’s export-oriented economy.

The seasonally unadjusted trade surplus went down to 244.9 billion euros ($300.86 billion) from the record-high of 248.9 billion euros in the previous year, according to the Federal Statistics Office.

The wider current account surplus, which measures the flow of goods, services and investments, edged down to 257.1 billion euros from 259.3 billion euros in the previous year.

In December alone, seasonally adjusted exports rose by 0.3 percent on the month while imports rose by 1.4 percent, the data from the statistics office showed.

The exports figure beat expectations for a 1.0 percent fall while imports also came in stronger than the forecast for a 0.5 percent decrease.

The seasonally adjusted trade surplus in December narrowed to 21.4 billion euros. This was smaller than the Reuters consensus forecast for a surplus of 21.7 billion euros. ($1 = 0.8140 euros) (Reporting by Michael Nienaber; Editing by Paul Carrel) </s> The shrank in the second quarter, dragged down by a slump in exports, data showed on Wednesday, as manufacturers in Europe's largest struggle against weaker foreign demand and trade disputes.

Gross domestic product (GDP) fell 0.1% quarter-on-quarter after a confirmed growth rate of 0.4% in the first three months of the year, the Federal Statistics Office said.

The preliminary reading for April-June was in line with a Reuters poll of analysts.

The annual growth rate slowed to 0.4% in the second quarter from 0.7% in the first, calendar-adjusted data showed. That beat the poll forecast of +0.1%.

"The development of foreign trade slowed down economic growth because exports recorded a stronger quarter-on-quarter decrease than imports," the statistics office said.

Positive contributions came from domestic demand as household consumption, government expenditure and gross fixed capital formation increased on the quarter, the office said.

Construction declined in the second quarter after the sector pushed up overall growth in the first three months due to an unusually mild winter, the data showed.

"For a year now, the has been only crawling forward," Unicredit analyst Andreas Rees said, adding there was hardly any improvement in sight for the second half of 2019 as there were many uncertainties for German exporters.

"Besides Brexit, this is above all the U.S.-Sino trade dispute and possible U.S. tariffs on European cars," Rees said.

Following release of the data, the yield on Germany's benchmark 10-year government bond dropped to a record low of -0.623%. </s> Germany’s GDP shrank by 0.1 percent in the second quarter, fuelling fears of a recession and causing economists to call for policies to tackle corporate tax cuts and increased investment in Germany. The prospects of further deterioration over the coming months due to weak exports and weak manufacturing figures give little hope for a speedy recovery according to economic experts. Martin Wansleben, Managing Director of the Association of German Chambers of Industry and Commerce (DIHK) said: “After the good start of the year, the companies have arrived in the harsh economic reality and there is currently no turning point in sight.

“Business expectations are falling in all sectors.” Mr Wansleben warned: “If we do not take countermeasures, the German economy will literally be caught out in the face of a slowing economy.” According to Bank Lampe, after a slight decline in economic output in the second quarter, Germany is facing a technical recession, ie a further decline in gross domestic product (GDP) in the current third quarter. Chief economist Alexander Krüger expects that in addition to the known problems of the industry there will be a “backlash” against the strong increase in consumption in the second quarter.

Here are four reasons Germany could be heading for a recession As the UK faces political deadlock and the Brexit deadline of October 31 approaches, countries in the EU are feeling a knock-on effect. In surveys, German business has touted the threat of the UK leaving the European Union without a no deal to be a key worry impacting the economy. Germany’s third-largest export market in Europe and the fifth worldwide is the UK, with $92bn (£76.15 billion) of goods exported in 2018. Should no-deal Brexit take place, Germany could see it's economy slump even further. Read More: Merkel's successor sees popularity slump in as pressure grows

As trade tensions between China and the US increase, Germany has been affected due to its dependence on export markets. German industrial production fell 5.2 percent year-on-year in June, which was the biggest decline since 2009. Melanie Vogelbach at the Association of German Chambers of Industry and Commerce said: “The challenges for the German economy are mainly based on international factors: trade conflicts, sanctions and the scenario of a no-deal Brexit. “Trade wars are never good and for an economy that relies as much on exports as German industry, that is a very important factor.” Exports for Germany have fallen eight percent over the past year.

As Europe’s biggest economy, and the fourth largest worldwide - Germany feels the knock-on effects of economic issues elsewhere. Ahead of the Netherlands and the UK, China is Germany’s third-largest export market and it the worst growth in the three months to June since 1992. Before the trade war began, China’s economy was already facing a slight decline, but the higher US tariffs have accelerated this. Read More: Germany heading to recession - Merkel quitting will trigger crisis </s> • Germany’s economy shrank 0.1% in the second quarter, driven by a decline in exports due to the US-China trade war.
• The slowdown is bad news given Germany is Europe’s largest economy and a key player in the eurozone.
• The contraction comes after the UK economy shrunk last week for the first time since 2012 due to Brexit fears, underlining how political uncertainty is weighing on Europe.

Germany’s economy shrank by 0.1% in the three months to June, signaling a recession could be looming.

The decline marks a sharp shift from the 0.4% growth it recorded in the first quarter of 2019, according to Statistisches Bundesamt, the Germany’s statistics office. Europe’s biggest economy grew the least in six years in the first quarter, according to the Financial Times.

Much of the decline was driven by a slump in exports, which have suffered from tempered demand due to the US and China’s trade war.

“The development of foreign trade slowed down economic growth because exports recorded a stronger quarter-on-quarter decrease than imports,” the Statistisches Bundesamt said.

Signs for the next quarter look “ominous,” Capital Economics said in an email. “Manufacturing business surveys for July were all gloomy, as was the ZEW survey for August.”

“While the services sector should continue to hold up better, there are some signs that the slump is spreading to the labour market,” the economic research firm added. “The bottom line is that the German economy is teetering on the edge of recession.”

Several of Europe’s economies are weathering growth slowdowns, many due to political uncertainty. Brexit fears fueled a 0.2% contraction in Britain’s economy last quarter – its first decline since 2012.

“Today’s disappointing GDP figure is set to raise alarm bells over Brexit dragging the UK economy deeper into the abyss,” Lukman Otunuga, a senior research analyst at FXTM, said at the time. </s> Germany's economy contracted by 0.1 percent in the second quarter of 2019, the country's statistics office said in a statement Wednesday.

It was the second time in a year Germany has reported a shrinkage in GDP in a quarterly review as the engine of the European Union starts to feel the effects of the United States-China trade war and tremors in the automobile industry.

"In the second quarter of 2019, the real (price-adjusted) gross domestic product in Germany decreased by 0.1% on the first quarter of 2019, after adjustment for seasonal and calendar variations," the government office said.

"The Federal Statistical Office (Destatis) also reports that Germany experienced a slight decline in economic performance."

"The development of foreign trade slowed down economic growth because exports recorded a stronger quarter-on-quarter decrease than imports."

The slump in the second quarter of the year comes after a 0.4 percent increase in the first.

Fears of a recession already reared their head when Germany closed out a flat year in 2018 marked by a 0.2 percent contraction in the economy in the third quarter.

Compared to the same quarter the previous year, the German economy was up 4 percent, Destatis said.

One of the driving factors behind the poor results is the ongoing trade tariff war between Beijing and Washington, the effects of which have rippled across the global economy.

According to data released in recent days, German industrial production fell 5.2 percent year-on-year, the largest decline in a decade, while exports dropped 8 percent, a three-year low.

Brexit has also added to the uncertainty, with the UK's new prime minister, Boris Johnson, harnessing a potential no-deal Brexit as an outcome while a general cooling in the eurozone also had its effect.

Germany's all-important motor industry, its main export, has also suffered a drop in demand, partly due to new emission standards put out by the European Union last year. EFE-EPA </s> BERLIN (Reuters) - The mood among German investors brightened unexpectedly for the second month in a row in September, a survey showed on Tuesday, as concerns about an escalating tit-for-tat trade dispute faded.

The ZEW research institute said its monthly survey showed economic sentiment among investors improved to -10.6 from -13.7 in August. This compared with the Reuters consensus forecast for a reading of -14.0.

“During the survey period, the currency crises in Turkey and Argentina intensified, while German industrial production and incoming orders were surprisingly low in July,” ZEW President Achim Wambach said in a statement.

The ZEW survey comes after the influential Ifo survey showed German business sentiment picked up for the first time this year in August.

German exports and industrial output both fell unexpectedly in July, hit by U.S. President Donald Trump’s protectionist trade policies and bottlenecks in the auto sector caused by new environmental standards.

“Despite these unfavourable circumstances, economic expectations for Germany improved slightly,” Wambach said, adding that fears regarding economic development had diminished following a trade deal between the United States and Mexico.

Trump has struck a trade deal with Mexico and threatened to update the North American Free Trade Agreement (NAFTA) without Canada.

Moving ahead without Canada would kill NAFTA, which covers $1.2 trillion in trade between the three countries, and spook financial markets. But Canada’s top trade negotiator said on Friday that she and her U.S. counterpart were making “very good progress” in talks to save NAFTA.

A separate ZEW gauge measuring investors’ assessment of the economy’s current conditions rose to 76.0 from 72.6 in the previous month. The Reuters consensus forecast was for a reading of 72.0.
Germany's trade surplus shrank in 2017 for the first time since 2009, reflecting strong domestic demand.