Rebounding trade and weak euro boost exports

Rebounding trade and weak euro boost exports
Photo: DPA
German exports surged in February after sharp drop in January, official data showed on Friday, boosted by stronger global trade and a weaker euro.

German exports jumped by 4.7 percent from January, and recorded a yearly gain of 9.6 percent, the Destatis statistics office said. The country’s trade surplus climbed to €12.6 billion ($16.8 billion) from €8.9 billion in February 2009, it added.

The data represented a partial correction of January’s steep 6.3 percent monthly drop in exports, and indicated that an increase in global trade was benefiting Germany’s export-led economy, the biggest in Europe.

Germany lost its title of leading global exporter to China last year, but will also get a boost this year from the euro’s fall in value against other major currencies.

In February, German exports reached a total value of €70 billion, while imports increased by 4.2 percent on an annual basis to €57.3 billion, Destatis said.

The country’s current account balance of payments, a broader measure of trade with other counties, showed a surplus of €9.1 billion in February, up from €7.1 billion a year earlier.

Germany has been criticised by less competitive eurozone partners for focusing on exports at their expense while neglecting measures to boost domestic consumption.

“Today’s sharp increase in German exports was not, yet, enough to turn net

exports into a growth driver in the first quarter but it clearly shows that the export-led recovery is still intact,” ING senior economist Carsten Brzeski commented.

Although other German data for February has disappointed, with stagnating industrial production and orders and weak private consumption, a large part of the government’s stimulus plans have yet to kick in, he noted.

“Positive growth surprises are still in the pipeline,” Brzeski concluded.

For UniCredit counterpart Andreas Rees, “the latest trade figures resemble more a ride in a rollercoaster than a fundamentally meaningful pattern.”

He forecast that German growth would be weak in the first three months of the year but added: “We might get a German economy rising like a phoenix in the second quarter.”

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