German exports fall less-than-expected 0.9% in July

FILE PHOTO: A crane lifts a shipping container at the HHLA Container Terminal Altenwerder on the River Elbe in Hamburg, Germany

BERLIN (Reuters) -German exports fell a less-than-expected 0.9% in July from a month earlier as global demand continued to falter, data from the federal statistics office showed on Monday.

The result compared with a forecast 1.5% decline in a Reuters poll.

"Trade is no longer the strong resilient growth driver of the German economy that it used to be, but rather a drag," said Carsten Brzeski, global head of macroeconomics at ING.

Supply-chain friction, a more fragmented global economy and China increasingly being able to produce goods it previously bought from Germany were all factors weighing on exports in June, Brzeski said.

Imports rose 1.4% on the month, the data showed.

The foreign trade balance showed a surplus of 15.9 billion euros ($17.15 billion) in July, versus 18.7 billion euros the previous month.

With July's drop in retail sales and July's disappointing export data, the third quarter for the German economy has started on a very weak footing, indicating that the risk of sliding back into contraction remains high, Brzeski said.

Exports to European Union countries rose 0.5% from a month earlier, whereas those to non-EU countries declined 2.5%, the office said.

"It is not only the global weakness in demand that is causing companies more and more problems," said economist Bastian Hepperle at Hauck Aufhaeuser Lampe Privatbank. "They are also suffering from the erosion of their competitiveness on the global sales markets."

German export expectations have deteriorated slightly due to weak foreign demand, an Ifo survey showed in August.

"As long as the global economic environment remains weak, German exports will also remain depressed," said Thomas Gitzel, chief economist at VP Bank.

($1 = 0.9273 euros)

(Rerpoting by Maria Martinez; Writing by Friederike Heine; Editing by Alex Richardson and Christopher Cushing)