German Export Slump
March 10, 2009
German exports dived 20.7 percent in January 2009 compared to a year ago, its biggest drop in the last 16 years. The world's leading export nation exported 66.6 billion euros ($85 billion) worth of goods in January 2009 compared to 84 billion euros reported the previous year, according to preliminary figures released from the Federal Statistics Office in Wiesbaden on Tuesday, March 10.
Germany has been especially hard hit by the global recession, with a steep decline in its key export markets in Europe and Asia.
"The growth engine of the German economy is out of fuel," said ING economist Carsten Brzeski. "Any stabilization of the economy of the economy in 2007 will have to come from domestic demand," he told the DPA news agency.
Sharper export decline in non-EU countries
The decline marked Germany's fourth consecutive monthly drop in exports as Europe's largest economy faces its worst recession since the end of World War II. German exports to its partners in the euro zone fell by 18.7 percent from 2008. Exports to non-EU countries plunged by 24.5 percent of 2008 levels.
The sharp contraction in key industries such as engineering goods and the auto industry contributed significantly to the fall in exports.
January 2009 imports also fell by 12.9 percent from 67 billion euros in 2008 to 58 billion euros. The drop represents a 4.4 percent drop from December alone, making it the fourth consecutive monthly decline as well.
Commerzbank analyst Simon Junker told the AFP news agency that "foreign trade is expected to have a sharp negative impact on growth again in the first quarter" of 2009.
German exports hard hit in eastern Europe
Germany's trade surplus was down to 8.5 billion euros, compared with double the amount -- 17 billion euros -- in January 2008.
A current account surplus, which is the broadest measure of trade activity that includes services and financial transfers, plunged more than three-fold to 4.2 billion euros from 15.6 billion euros, according to the Federal Statistics Office.
The German government expects output to shrink 2.25 percent this year.
"So far, there are no visible signs of a fast recovery: The economies in industrial countries remain weak and the current crisis in eastern Europe is a further strain," Commerzbank's Junker said.
Since a large proportion of Germany's European trade comes from countries in the former eastern bloc, which are not euro-zone members, a sharp depreciation of their currencies against the euro has hurt their purchasing power.