German exports take unprecedented dive | Business| Economy and finance news from a German perspective | DW | 09.06.2020
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German exports take unprecedented dive

German exports plunged over 30% in April year on year, marking the steepest fall yet since current records began in 1950. The coronavirus crisis and its accompanying lockdowns made it extremely hard to sell any goods.

German exports shrank by a staggering 31.1% to €75.7 billion ($85.4 billion) in April year on year, the Federal Statistics Office (Destatis) reported Tuesday. It was the biggest drop since 1950.

In a month-on-month comparison, German shipments abroad decreased by 24%, reflecting the impact of the coronavirus crisis in the March-to-April period.

Destatis noted that the unparalleled dive came in the wake of closed borders in the European Union and beyond, lockdowns and ensuing logistical problems in getting goods to other nations.

No homogeneous picture

A closer look at Tuesday's figures reveals that German exports to China dropped by only 12.6% in April, with the Asian country showing a quicker recovery from the pandemic and getting its economy going again.

By contrast, trade with traditional European partners took a severe blow. German shipments to France decreased by 48.3%, while exports to Italy tanked by 40.1% in April compared with the same month last year.

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The Association of German Chambers of Industry and Commerce (DIHK) expects German exports to tumble by 15% for the whole year.

The World Trade Organization (WTO) sees global trade going down between 13% and 32% in a worst case scenario, depending on how the coronavirus crisis will pan out in the months ahead.

Global trade had already stagnated in 2019 as a string of international trade conflicts and a general cooling of major economies around the global economies weighed on demand.

Long road of recovery ahead

Commenting on the steep dive in German exports in April, VP Bank Liechtenstein Chief Economist Thomas Gitzel said "there can be no more talk of Germany being an export giant — the impact on the nation's gross domestic product this year is bound to be huge."

Bankhaus Lampe Chief Economist Alexander Krüger added that "leaving the coronavirus valley will be a long and bumpy undertaking — I hope we'll be spared new virus hotspots that would further delay an easing of the export dilemma."

In a bid to speed up recovery, the German government last week announced a €130 billion stimulus package to help boost domestic demand. It came on top of €750 billion worth of measures agreed in March to cushion the impact of the pandemic.

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hg/aos (dpa, Reuters)