Exports plunge as global recession bites

Exports plunge as global recession bites
Quite time at the Hamburg harbour. Photo: DPA
German exports plunged in November at their sharpest rate since 1990, data showed Thursday, as the global recession pulled the plug on demand for goods from the world's biggest exporter.

Seasonally adjusted exports in Germany, Europe’s biggest economy, dropped 10.6 percent from the previous month, the statistics office Destatis said in a statement.

The “dramatically bad” fall was the biggest drop since East and West Germany were united in 1990, Commerzbank economist Jörg Krämer noted, saying the decline was across the board.

Compared to November last year, the figures were equally bad: exports plunged 11.8 percent to €77.1 billion ($96.2 billion). Imports slid 0.9 percent to €67.4 billion. As a result, Germany’s trade surplus contracted sharply in November, falling to €9.7 billion from €16.4 billion in October.

The country’s current account, its broadest measure of trade in goods and services with other nations, also fell markedly to €8.6 billion from €14.3 billion the previous month, the Destatis service said.

Those results were well below forecasts of analysts polled by Dow Jones Newswires, who had expected a trade surplus of €16.2 billion and a current account surplus of €17.0 billion.

Germany, which has a economy highly dependent on exports, has been slammed by the sharp slowdown in economic activity in key markets in the United States, Europe and Asia.

Krämer said the collapse in exports underpinned his bank’s forecast that German output would decline by a record 2.0 percent in the fourth quarter of 2008 from the previous three-month period.

The country is already in recession after gross domestic product contracted in the second and third quarters of last year.

“For 2009 as a whole we continue to expect German GDP to decline between 2.0 and 3.0 percent,” the Commerzbank economist said.

The German economy ministry has not ruled out the possibility that economic activity could shrink by up to 3.0 percent.

Krämer also pointed to comments by European Central Bank President Jean-Claude Trichet in an interview released on Thursday, which noted a “significant deterioration” in the growth outlook.

The comments will likely raise expectations of a fourth ECB successive interest rate cut next week from the current benchmark level of 2.50 percent.

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