German exports declined in February as demand from emerging markets was hit by outflows of capital and falling currencies. Imports, however, continued to rise, narrowing Germany’s controversial trade surplus.
In the month of February, Germany's export-driven economy shipped goods and services worth 92.4 billion euros ($127.4 billion) - a drop of 1.3 percent compared with the previous month of January, according to latest figures released by the German statistics office, Destatis, on Wednesday.
The volume of imports to Germany in February rose by 0.4 percent, Destatis added, after gaining 2.2 percent in January. As a result, Germany's trade surplus shrank for a second consecutive month, reaching 15.7 billion euros in February.
Analysts were surprised notably by the significant month-on-month fall in exports because they had previously forecast a decline of only 0.5 percent for February.
Berenberg Bank analyst Christian Schulz told the news agency Reuters that German exports had been under pressure from financial turmoil in emerging markets, as well as from the fallout from the Ukraine crisis.
Rainer Sartorius of the bank HSBC Trinkhaus noted that weakening demand from China and the harsh winter weather in the United States in February added to the trend.
Surplus offset by stronger imports
Both experts predicted a continuing trend toward stronger imports than exports in Germany.
“This speaks positively for a robust domestic demand, both from German businesses and consumers, and helps the recession-hit eurozone countries to export their way out of the crisis,” Schulz added.
In a year-on-year comparison, Germany's exports and imports, however, were markedly higher than in February 2013. Exports gained 4.6 percent over the period, while imports rose 6.5 percent, Destatis data showed.
Over the year, the increase in trade was mainly driven by the recovery in European Union member states, which took in 6.7 percent more than last year and shipped 9 percent more goods and services to Germany.
uhe/ipj (dpa, Reuters, AFP)