The international financial crisis is having an impact on Germany's export sector. Recent statistics, however, show the damage isn't as bad as analysts had expected.
Exports grew by 4.4 percent this year, but are expected to drop next year
German exports fell in October, the nation's statistics office said Tuesday, Dec. 9, as slowing global growth undercut foreign orders for Europe's biggest economy and the world's largest exporter.
Adjusted for working days and seasonal factors, exports dropped by 0.5 percent month on month in October after rising by 0.8 percent in September.
However, the fall in October was less than expected; analysts had predicted that signs of a global economic slowdown would result in German exports slumping by more than one percent. Year on year, exports rose 1.4 percent in October.
Economy expected to shrink in 2009
Germany's economy will contract by 0.8 percent next year, led by a slump in exports, the nation's central bank, the Bundesbank, said in its latest economic projections released last week.
After growing by 4.4 percent his year, exports are expected to decline by 0.5 percent next year, according to Bundesbank's analysis.
Adding to the evidence that a sharp downturn has been taking hold in Germany, Tuesday's data showed imports slumping by 3.5 percent month on month in October. Year on year imports posted a 5.4-percent rise.
With the strong drop in imports, Germany's trade surplus widened in October to 16.5 billion euros ($21 billion), from 15 billion euros in September, the statistics office said.
Investor confidence poll surprises
Also on Tuesday, Germany's closely watched ZEW investor confidence survey showed a significant rise for December.
ZEW said its investor confidence index had risen to minus 45.2 points this month from minus 53.5 points in November. Analysts had predicted a further drop to minus 55 points.
However, in a second survey measuring financial sector specialists' view of current conditions, the index fell from 50.4 points to 64.5 points in December.
The results of the poll come as Germany, Europe's largest economy, has slipped into a recession.