Trade is the lifeblood of a global market. Exports growth drives the rate of economic growth, and the distribution of income and wealth. Its effect is thus significant on internal trade and economic stability.  With such importance of exports, yesterday Germany reported record exports and imports growth in July since the German reunification.

The record growth is a much-cherished one as it quells fears of China having any impact on this economic powerhouse. Germany not only is Europe’s leading economy, but it is now also the second-largest exporter in the world. The record highs in value terms indicate the appetite for goods from Germany is alive and well, and the country tends to expect continual economic growth.

Trade Data

According to Germany’s Federal Statistics Office, exports gained a seasonally adjusted 2.4% from prior month to 103.4 billion euros ($115.35 billion) in July. Imports were up 2.2% to 80.6 billion euros. These are the highest values since records started in 1991. Both exports and imports comprehensively beat expectations of gains of 0.7% and 0.5% respectively. On seasonally adjusted basis, foreign trade balance showed surplus of 22.8 billion euros.

Looking into the unadjusted breakdown, exports to countries within the Eurozone gained 5.5% year on year. Shipments to countries within the European Union not using the common currency gained 6.9%. Meanwhile, another encouraging sign was the 6.4% growth in demand for German goods outside the EU.

In the seven months through July, shipments to EU countries outside the currency bloc increased 8.3% year on year and those for non-EU nations were up 7.9%. For countries within the euro area, the seven-month shipment gained 4.8%. This comes at a time when the euro has showed a sharp downward trend against the US dollar this year. For that matter, the benefit of a weaker Euro and Germany being in a comfortable position cannot be ruled out.

Going back to 2014 data, Germany exports had increased to $1.511 trillion, up nearly 4% over 2013. International Monetary Fund’s (IMF) World Economic Outlook Database showed Germany’s total GDP in 2014 was $3.621 trillion. Thus, exports contributed 41.7% of total German economic output.