German exports slump in April, trade surplus sheds 20 pct

8th June 2010, Comments 0 comments

Exports from Germany, Europe's biggest economy, slumped in April and its trade surplus fell by more than 20 percent, data published on Tuesday by the national statistics office showed.

The value of German exports fell by a seasonally adjusted 5.9 percent from their level in March to 74.3 billion euros (88.9 billion dollars), while imports dropped by 7.3 percent to 61.2 billion, the Destatis office said.

German exports had soared in March and economists expected the April figures to show a decline without disrupting the trend that is headed upwards over the longer term.

The world's second-biggest exporter after China posted an uncorrected trade surplus of 13.4 billion euros, down from a revised 16.9 billion euros the previous month.

The sharp drop in April exports "was the almost natural correction after an exceptionally strong month of March," ING senior economist Carsten Brzeski said.

Germany has also been pressed by eurozone neighbours and the United States to boost domestic consumption and balance out a persistent trade surplus.

But "looking ahead, with strong global demand and the weak euro exchange rate, exports should continue to be the main driver of the German recovery," Brzeski added.

Pressure on the euro against other major currencies eased on Tuesday but the unit remained depressed a day after hitting a four-year low on deepening fears over Europe's debt woes, Tokyo dealers said.

The single European currency traded at 1.1962 dollars in late Asian trading.

A steep drop by the euro since late last year has boosted many exports from the 16-nation eurozone, and the German economy ministry said on Monday that industrial orders gained 2.8 percent in April on a monthly basis.

That was the result of both stronger domestic and foreign demand, but the value of foreign orders has now reached levels seen before US investment bank Lehman Brothers collapsed in September 2008, deepening the global financial crisis.

"The trend in German exports is clearly pointing further up," Commerzbank economist Simon Junker said.

Berlin will probably have to depend on the country's well-oiled export machine for a while, after unveiling on Monday deep spending cuts that could curb domestic demand.

By 2014, the government hopes to cut 86 billion euros in spending as part of its effort to reach an essentially balanced budget by 2016 at the latest.

"I think recent months have shown, in the case of Greece and other eurozone countries, how extraordinarily important sound finances are -- they are basic conditions for stability and prosperity," Chancellor Angela Merkel said.

© 2010 AFP

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