RTTNews - Germany's exports contracted at an even faster pace annually in April, as global demand continued to remain weak, an official report showed Tuesday.
Data released by the Federal Statistical Office said exports dropped 28.7% year-on-year in April, faster than a 16.2% fall in March, and was the biggest drop since the country's exports embarked on a declining trend in November last year. Further, the latest decline is reportedly the largest on record.
At the same time, imports declined 22.9%, sharper than a 12% slump in the preceding month.
The trade surplus came in at EUR9.4 billion, smaller than an EUR11.3 surplus in the preceding month, but was above economists' expectations of an excess of EUR9.3 billion.
Month-on-month, exports were down 4.8% and imports were lower by 5.8% in April after seasonal and calender adjustments were made. Exports were up 0.3% in March.
In April, exports to all of Germany trading partners plunged on an annual basis. Exports to the Eurozone dropped 28.8%, while they declined 32.2% to the non-Eurozone EU countries. Exports to the EU nations were down 29.9%, while those to countries outside the EU were down 26.5%.
Imports from the Eurozone fell 21.8%, while they declined 23.7% to the non-Euro countries. Imports from EU nations dropped 22.3% in April, while those from countries outside EU fell 23.8%.
Meanwhile, provisional results released by the the Deutsche Bundesbank said the current account surplus came in at EUR5.8 billion, lower than a surplus of EUR11 billion in the preceding month. Economists were forecasting the surplus to be EUR10 billion.
In a note, Commerzbank analyst Simon Junker said, The trade balance should prove much less of a drag on economic growth. The analyst expects net exports to be much less negative than in the first quarter due to the stronger decline in imports.
Going forward, Commerzbank expects exports to fall less sharply or stagnate in the next few months as the foreign trade climate gradually stabilizes. This will help the German economy to end its nosedive in the second half of the year, Junker said.
Earlier last week, the Bundesbank cut the country's growth forecast for 2009, as the economy recorded the biggest contraction since the 1970s in the first quarter. During the three months ended March, the GDP was down 3.8% sequentially, representing the fourth straight quarterly decline, after a 2.2% drop in the fourth quarter.
The Bundesbank expects the GDP to now contract 6.2% this year and forecasts economic activity to remain subdued in 2010, even as it picks up slightly over the course of the year. The latest outlook for 2009 is a sharp downward revision from a 0.8% contraction expected last December.
At the same time, the central bank said the biggest Eurozone economy could gain some ground in the third quarter of 2009 as monetary and fiscal stimuli ease tensions in the international financial markets. Inflation for this year is forecast to be at 0.1% and is expected to rise to 0.5% next year.
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