On Wednesday, Federal Statistical Office data showed that German exports registered an unexpected plunge in September, decreasing by 0.5 per cent in the month. The data also showed that imports dropped more than expected, down 2.3 per cent.

A Reuters poll had predicted a month-on-month rise in exports of 0.1 per cent, while imports were expected to decline 0.4 per cent. Germany had a seasonally adjusted trade surplus of 3.7 billion euros (USD 3.66 billion) in September, surging past a forecast surplus of 700 million euros.

Most imports came from China, which saw a 5.4 per cent increase in September, while exports to China saw a 2 per cent drop. It is to be noted that China is Germany’s single biggest trade partner. Reportedly, German Chancellor Olaf Scholz is heading to China this week. The trip will be closely watched for clues on how serious Germany is about reducing its economic reliance on Asia’s rising superpower.

Sentiment among German exporters grew slightly in October, according to an Ifo institute survey this week. Still, the situation remains challenging due to tense energy markets and a weak global economic environment.