Carsten Brzeski: Germany faces a slow economic recovery

(Patria) – The German export rate remained significantly lower than before the crisis in July, despite a 4.7% increase during the month.

These figures only confirm that Germany's economic recovery after the coronavirus pandemic will be slower than expected.

The import rate this month recorded an increase of only 1.1%, bringing the trade surplus to 18 billion euros, reports the Federal Statistical Office.

Nevertheless, the slight increase fuels expectations that Europe's largest economy will return to growth in the second quarter, thanks to a return to pre-crisis activity levels.

However, significantly weaker demand from economic partners such as the US, which is itself struggling to cope with the pandemic, prevents the economic recovery from gaining significant momentum.

According to the latest data, German exports to the US are down 17% compared to July last year. At the same time, exports to China, which is recovering faster than the US, show a decrease of only 0.1%.

Carsten Brzeski, chief economist for the Eurozone, warns that "we should not get carried away" by indicators suggesting GDP growth in the second quarter and the beginning of export sector recovery.

"(The numbers) are just a mechanical jump. In reality, the German export sector is still suffering from structural challenges such as trade tensions, Brexit, and disruptions to global supply chains, as well as the difficulties our main trading partners are facing in combating the virus," Brzeski emphasized.