German imports rise to highest level in 23 years in February

German imports climbed to their highest level since reunification while exports fell in February, in a sign that domestic demand in Europe’s largest economy is gathering pace.

Figures from the Federal Statistics Office showed seasonally-adjusted imports climbed by 0.4 percent to €77.6 billion, their highest level since the office started compiling seasonally-adjusted data for reunified Germany in January 1991.

Imports had been expected to increase by a smaller 0.1 per cent, according to a Reuters poll.

Exports dropped by a larger-than-expected 1.3 per cent, with economists putting this down to turbulence in emerging markets and the Crimea crisis. They had been forecast to fall by 0.5 per cent.

"Imports grew because consumers are consuming more and companies are investing more. This trend of imports growing more quickly than exports should continue," said Christian Schulz, senior economist at Berenberg Bank.

“That’s a good sign for domestic demand. That helps the euro zone crisis countries to grow their way our of the crisis with exports.”

The government expects domestic demand to drive growth this year while foreign trade, which has traditionally propelled the German economy, is forecast to be a drag.

A breakdown of unadjusted data showed euro zone countries are selling more to Germany, with imports from the single currency bloc up 8.4 per cent on the year in February in a sign that a rebalancing of the region’s economy, which many economist say is key to resolving its crisis, is underway.

Unadjusted exports to the euro zone increased by 3.7 per cent in February compared to the same period last year, while exports to non-euro zone countries in the EU surged by 12.4 per cent.

The data showed Germany’s high current account surplus, which has been a target of criticism in recent months, shrunk to €13.9 billion in February from €15.2 billion the previous month.

Critics including the United States have said Germany relies too much on exports for growth and should do more to foster domestic demand, which would help struggling euro zone states, but Wednesday’s data could help deflect that.

The seasonally adjusted trade balance narrowed to €15.7 billion from an upwardly revised €17.3 billion in January.

Reuters