German exports will continue to defy hard economic times in some key markets and could reach record levels in 2015, one of Germany's leading trade organizations said Tuesday.
Buoyed by steady growth in the US, China and some eurozone countries, the level of goods sold abroad by Europe's largest economy is expected to increase by 4.5 percent to 1.19 billion euros ($1.27 billion) this year, the Federation of German Wholesale, Foreign Trade and Services (BGA) said.
As the American economy recovers faster than expected from years of stagnation and China maintains steady - albeit it less robust - upward momentum, German manufacturers will be able to offset losses suffered in ailing markets in Russia, Ukraine and oil-rich countries.
Business in Ukraine, Russia falters
German exports to Russia collapsed by nearly one-fifth last year after crippling international sanctions imposed over Moscow's support of anti-Kyiv rebels triggered a currency crisis.
Turmoil in Ukraine, which has sent the embattled country's currency reeling, inflated the price of high-quality German exports and caused 33.1 percent fewer goods from Germany to be sold there.
Exports to eurozone countries have been sluggish since the financial crisis struck in 2008, but hard-hit countries like Spain and Portugal actually increased the amount of goods and services purchased from Germany by around 10 percent last year.
Weak euro is a double-edged sword
A weak euro has also been a boon for Europe's leading export nation, although BGA President Anton Börner warned such benefits were superficial and short-term as he criticized the European Central Bank (ECB) for pumping billions of freshly minted euros into the eurozone economy.
"This step destroys the trust in a stable currency that is necessary around the world and endangers European unity," Börner said, adding that the ECB had effectively paved the way for a currency war.
He said Germany was only able to capitalize on a weak euro because fuel prices were also so low. Germany is also one of the world's leading importers and a feeble currency would take a major chunk out of firms' bottom lines under other circumstances.
That is especially true as German imports are also expected to increase by about 4 percent to 954 billion euros in 2015, leaving the country's trade deficit - a major source of contention for Germany's international partners - at around 231 billion euros.
After hitting record levels at the end of last year, German exports dropped in January amid weaker demand from the eurozone. Imports declined less significantly, causing the country's trade surplus to narrow briefly.
cjc/hg (dpa, Reuters)