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TRADE

Exports and imports hit record sums

A pick up in global trade saw Germany post record exports and imports in March, official data showed Monday, while its trade surplus climbed more than 11 percent on a yearly basis to €18.9 billion.

Exports and imports hit record sums
Photo: DPA

Germany recorded exports worth €98.3 billion, a monthly increase of 7.3 percent, and also received a record amount of imports, worth €79.4 billion, for a monthly increase of 3.1 percent, the figures showed.

“That was the highest monthly figure recorded for both exports and imports since the collection of foreign trade statistics had started in the Federal Republic of Germany in 1950,” the national statistics service said.

When adjusted for calendar and seasonal effects, the country’s trade surplus came to €15.2 billion in March, the Destatis office said.

Citing data provided by the German central bank, it added that the current account of the balance of payments, a broad measure of a nation’s trade with partners, came to €19.5 billion in March, up from €18.8 billion a year ago.

Also on an annualised basis, exports by Germany, the world’s second biggest exporter after China, gained 15.8 percent, while imports were 16.9 percent higher, the figures showed.

“Since the trough of the recession, exports have increased by more than 30 percent, returning to their pre-crisis level,” ING senior economist Carsten Brzeski noted.

“Looking ahead, exports should remain a reliable source for growth, even if the pace of export growth is about to slow down,” he added.

AFP/djw

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ECONOMY

German consumer prices set to rise steeply amid war in Ukraine

Russia's war in Ukraine is slowing down the economy and accelerating inflation in Germany, the Ifo Institute has claimed.

German consumer prices set to rise steeply amid war in Ukraine

According to the Munich-based economics institute, inflation is expected to rise from 5.1 to 6.1 percent in March. This would be the steepest rise in consumer prices since 1982.

Over the past few months, consumers in Germany have already had to battle with huge hikes in energy costs, fuel prices and increases in the price of other everyday commodities.

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With Russia and Ukraine representing major suppliers of wheat and grain, further price rises in the food market are also expected, putting an additional strain on tight incomes. 

At the same time, the ongoing conflict is set to put a dampener on the country’s annual growth forecasts. 

“We only expect growth of between 2.2 and 3.1 percent this year,” Ifo’s head of economic research Timo Wollmershäuser said on Wednesday. 

Due to the increase in the cost of living, consumers in Germany could lose around €6 billion in purchasing power by the end of March alone.

With public life in Germany returning to normal and manufacturers’ order books filling up, a significant rebound in the economy was expected this year. 

But the war “is dampening the economy through significantly higher commodity prices, sanctions, increasing supply bottlenecks for raw materials and intermediate products as well as increased economic uncertainty”, Wollmershäuser said.

Because of the current uncertainly, the Ifo Institute calculated two separate forecasts for the upcoming year.

In the optimistic scenario, the price of oil falls gradually from the current €101 per barrel to €82 by the end of the year, and the price of natural gas falls in parallel.

In the pessimistic scenario, the oil price rises to €140 per barrel by May and only then falls to €122 by the end of the year.

Energy costs have a particularly strong impact on private consumer spending.

They could rise between 3.7 and 5 percent, depending on the developments in Ukraine, sanctions on Russia and the German government’s ability to source its energy. 

On Wednesday, German media reported that the government was in the process of thrashing out an additional set of measures designed to support consumers with their rising energy costs.

The hotly debated measures are expected to be finalised on Wednesday evening and could include increased subsidies, a mobility allowance, a fuel rebate and a child bonus for families. 

READ ALSO: KEY POINTS: Germany’s proposals for future energy price relief

In one piece of positive news, the number of unemployed people in Germany should fall to below 2.3 million, according to the Ifo Institute.

However, short-time work, known as Kurzarbeit in German, is likely to increase significantly in the pessimistic scenario.

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