Germany's Current Account Surplus Declines in 3rd Q: Data for October Suggests a Better 4th Quarter

Germany released data today for the third quarter balance of payments on a seasonally adjusted basis and for the month of October on a seasonally unadjusted basis. Late last week monthly data on total trade and trade in goods were released for October and trade by major product groupings and by broad country groupings were released for September.

On a seasonally unadjusted basis, Germany's current account surplus rose to 11,573 million euros in October from 9,682 in September and was 5,803 million euros above October 2005. The seasonally unadjusted data are erratic, but as the first chart shows, the October surplus is a near record. The recent rise in the surplus has been due, in part, to a sharp decline in the year to year declines in energy imports as the price of oil has fallen. The second chart shows the year over year changes in millions of euros in total imports and in energy imports.

Another feature of Germany's improved balance of good has been the relatively greater increase in trade with non European countries than with European countries. This is notable in view of the slow down in the United States. The third chart compares the year to year percentage changes in exports to Other Europe and Non Europe.

On a quarterly, seasonally adjusted bases, the current account for the third quarter was 1,930 million euros below the second quarter and 580 million euros below the third quarter of 2005. The strength of the rise in the current account surplus for October suggests that the fourth quarter current account may show an improvement in the current account on a quarterly basis.