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TRADE

German trade surplus hits record level

Germany's trade surplus soared to a new record high in 2013, although export momentum tailed off at the end of the year, official data showed on Friday.

German trade surplus hits record level
Containers at Hamburg docks. Photo: DPA
Europe's biggest economy notched up a trade surplus of €198.9 billion in 2013, the highest since foreign trade data have been compiled.
 
In 2012, the surplus had stood at 1€89.8 billion.
 
Germany has come under fire for its booming trade surplus, with critics arguing that its economic prowess comes at the expense of the eurozone's weaker members.
   
The critics, from both the EU and US, argue that Germany needs to boost domestic demand and so help its EU partners by spurring export-driven growth in their economies rather than continue to rely mostly on its own exports for growth.
   
But Berlin has persistently dismissed the criticism, arguing that the high surplus reflects the competitiveness of German firms.
   
Total exports slipped by 0.2 percent over the year as a whole, while overall imports fell by 1.2 percent.
   
But exports to the euro area were down 1.2 percent, whereas imports from the eurozone slipped only fractionally by 0.2 percent, Destatis calculated.
   
Exports to the wider EU edged up by 0.1 percent while EU imports grew by 0.8 percent.
   
A closer look at the monthly data showed that export momentum has also been tailing off at the end of the year,
   
In raw or unadjusted terms, the trade surplus narrowed to €14.2 billion in December from €19.1 billion in November.
 
Berenberg Bank economist Christian Schulz said the Destatis data painted an incomplete picture because imports from China, for example, which reach Germany via another eurozone country such as the Netherlands are counted as imports from the eurozone.
   
"But the trend towards rebalancing is clear nonetheless and also reflected in data from the Bundesbank that adjusts for the country of origin," Schulz said.
   
Schulz said that the outlook for German trade this year was "mixed".
   
"Strengthening export markets in the developed world could be offset by weaker demand in those emerging markets currently in turbulence. As long as China stays apart, the impact might be limited," Schulz said.
   
"But the trade surplus looks set to stabilize or even shrink as stronger domestic demand should boost imports more than strengthening global demand will increase exports," he said.
 

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EXPORTS

‘Trade has collapsed’: Germany sees business with UK slump after Brexit

Germany's exports ticked up in January on robust trade with China, but trade with another key trade partner, Great Britain, plummeted after the Britain left the EU.

'Trade has collapsed': Germany sees business with UK slump after Brexit
Southampton harbour. Photo:Andrew Matthews/DPA

The Brexit fallout has continued to hurt commerce with the United Kingdom, with federal statistics office Destatis recording a 29 percent plunge in German exports across the Channel.

Meanwhile, demand for UK goods in Germany collapsed by more than 56 percent, official data showed Tuesday.

Cross-Channel exporters have had to adapt to new customs requirements from January 1, following Britain’s 2016 decision to leave the European Union.

Firms on both sides have since complained of increased bureaucracy and shipment delays as they grapple with the new rules.

BREXIT: What changes in Germany from January 2021?

“Foreign trade with Britain has collapsed,” said LBBW bank economist Jens-Oliver Niklasch.

Overall, German exports rose 1.4 percent month-on-month in seasonally adjusted figures, Destatis said.

But imports sank as coronavirus shutdowns sapped consumer demand in Europe’s top economy.

Imports slumped 4.7 percent, widening Germany’s closely-watched trade surplus to 22.2 billion euros.

Compared with a year ago, before the pandemic ravaged the global economy, exports fell 8.0 percent in January and imports almost 10 percent.

“Consumer demand fell sharply in January due to a lack of opportunities” as the government kept non-essential shops, leisure and cultural centres closed to rein in the coronavirus,  Niklasch.

But demand for “made in Germany” goods was powered by vital trade partner China, which has recovered faster from the virus shock.

Exports to European Union countries plunged six percent year-on-year, while demand for EU goods within Germany was down by almost the same.

Combined with Germany’s struggles to bring down Covid-19 infections despite months of shutdowns, “the January reading is not an indication of renewed German export strength, but rather an alarm bell for the first quarter.”

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