German trade surplus shrinks as import growth powers ahead

Germany’s trade surplus narrowed in the first half of the year as strong domestic demand led to imports growing faster than exports, adding to signs that Europe’s largest economy is slowly reducing its dependence on foreign sales.

The International Monetary Fund and the European Commission have urged Germany for years to do more to lift domestic demand as a way to boost imports, stimulate growth elsewhere and reduce global economic imbalances.

As a slowing world economy, trade disputes and Brexit uncertainty take their toll on Germany’s traditionally export-reliant economy, record-high employment, inflation-busting wage hikes and low borrowing costs provide a buffer against external headwinds.

The Federal Statistics Office said on Friday that imports rose 3.0% to 556.2 billion euros ($622.2 billion) in the first six months. Exports grew 0.5% to 666.1 billion euros.

Year on year, the trade surplus narrowed to 109.9 billion euros from 122.4 billion. The current account surplus, which measures the flow of goods, services and investments, fell to 126.4 billion euros from 130.6 billion, the data showed.