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Ireland Revises Q1 GDP Down, Germany’s Exports Slide on U.S. Tariff Shifts

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Ireland’s CSO sharply revised Q1 GDP growth on July 8: annual expansion was cut to 7.4% from 9.7%, as surging U.S. pharmaceutical exports faded. The more indicative Modified Domestic Demand (MDD) was revised up to 2.0% from 0.8%, though 2024 full-year MDD growth was trimmed to 1.8% from 2.7%. GNI*, stripping multinationals’ distortions, showed 4.8% 2024 growth, highlighting GDP’s skew from cross-border capital flows.

Germany’s May exports dropped 1.4% month-on-month (vs. -0.2% expected), with U.S. shipments falling 7.7% after April’s 10.5% plunge. ING attributed this to reversed "pre-tariff rush"—firms frontloaded exports to avoid April’s 10% U.S. tariffs—rather than direct tariff hits. Commerzbank warned U.S. exports may keep shrinking if no EU-U.S. deal is reached by July 9 (seen as unlikely). Germany’s trade surplus rose to €18.4 billion as imports fell faster (-3.8%).

The data reflects divergent euro zone economic undercurrents: Ireland’s revisions reveal underlying domestic strength beyond volatile GDP, while Germany’s export slump underscores vulnerability to transatlantic trade policy shifts, with tariff-related timing effects complicating near-term trends.