German exports slump sharply as global economic woes rise | Business| Economy and finance news from a German perspective | DW | 08.06.2012
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German exports slump sharply as global economic woes rise

Germany's motor of economic growth sputtered in April, as exports of goods and services plunged sharply after record-setting volumes in March. Imports also shrank to the chagrin of eurozone partners.

German exports plummeted by 1.7 percent in April, with goods and services shipped abroad reaching a total volume of 87.1 billion euros ($108.9 billion) compared with 98.9 billion euros in March, the German statistics office, Destatis, said Friday.

In addition, imports to Europe's largest economy nosedived even more markedly, contracting 4.8 percent to an overall volume of 72.7 billion euros.

On a year-on-year basis, exports were still 3.4 percent higher than in April 2011, while imports shrank by 1.0 percent from the same month last year.

The April decline had brought to and end three consecutive months of gains, Destatis said, after exports had peaked in March at an all-time high.

In addition, the export figure was three times lower than predicted by analysts, and adds to signs that the global economy is faltering on the back of deepening economic gloom in the eurozone

Global woes

According to Citigroup analyst Jürgen Michels, the dip in exports must be attributed to "weakening global demand," as well as an "escalation" of the eurozone debt crisis, after elections in Greece and France

Even though he didn't expect a "sharp drop," he told Reuters news agency that exports would likely "continue stagnating" in the coming months.

HSBC Trinkhaus economist Stefan Schilbe told the same news agency that exports "won't contribute anymore" to German economic growth this year, as he expected "robust domestic consumption due to higher wages and lower unemployment" to drive expansion.

However, in this regard Berenberg Bank analysts Christian Schulz was "surprised" at the sharp decline in imports, telling Reuters that this was probably a result of "lower prices for oil" which Germany needed to import.

As the financial and economic crisis in the eurozone worsens, debt-laden member states are increasingly calling on Germany to import more goods and services to fuel growth in the currency area.

uhe/gb (Reuters, dapd, dpa)