German exports post historic plunge

German exports post historic plunge
Photo: DPA
German exports marked their biggest drop on record in April, officials said on Tuesday. But analysts expect the historic slump in Europe's biggest economy to ease in coming months.

German exports plunged by 28.7 percent in April from the equivalent figure last year, data from the national statistics office showed as German struggles with its worst recession since World War II.

It was the biggest drop since German records began in 1950.

“German companies still felt the pain in April,” UniCredit analyst Andreas Rees said. “But the signs are increasing that they will manage a comeback.”

The value of German exports amounted to €63.8 billion ($88.5 billion), the Destatis service said.

Imports decreased meanwhile by 22.9 percent to 54.4 billion euros, leaving Germany, a leading world exporter, with a trade surplus of 9.4 billion euros, it added, slightly higher than analysts forecasts.

Destatis also said that according to German central bank figures, the current account showed a surplus of €5.8 billion in April, down sharply from €15.4 billion a year earlier.

The current account of the balance of payments is the broadest measure of trade with other countries.

Rees noted however that there were two fewer working days in April 2009 compared with a year earlier, owing to the timing of Germany’s Easter break.

Trade data with other European Union members, Germany’s principle trading partners showed that exports had decreased by 29.9 percent on the year, while imports were off by 22.3 percent.

Exports to non-EU countries dropped by 26.5 percent and imports shed 23.8 percent, Destatis said.

Germany’s export-driven economy has been slammed by the global economic slowdown and the government estimates that gross domestic product (GDP) will shrink by 6.0 percent this year.

Destatis said that in the four months from January to April, German exports amounted to €262.8 billion, down from €341.3 billion in the same period a year earlier.

Figures for industrial production in April were due later on Tuesday, but the Economy ministry said Monday that industrial orders, another key indicator, were stable in April compared with the previous month.

That along with more positive leading indicators have suggested that the worst of the recession could be past.

Export expectations included in the widely-watched Ifo business sentiment index posted in May their strongest monthly rise since German reunification in 1990.

In the first quarter of 2009, the economy contracted by 3.8 percent, but the second quarter is expected to show that the rate of decline has slowed. “We think that is is now only a question of time before German companies will shift from reverse into first gear,” Rees said.

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