GERMAN EXPORTS have swung back to solid growth, surging by 7 per cent in June, according to data released yesterday that raised hopes of an early end to the country’s recession.
The unexpectedly large rise against the previous month added to evidence of a “V-shaped” recovery in Europe’s largest economy.
The increase in exports was the largest since September 2006.
Germany’s optimism had already been boosted by a 4.5 per cent rise in industrial orders in June, reported earlier this week, which was powered almost entirely by export orders.
Together the figures suggested Germany was among the European countries benefiting most from the recent stabilisation in global economic prospects.
“Definitely more is in the pipeline in the months to come,” said Andreas Rees, an economist at UniCredit in Munich.
The latest data would stop debate over whether Germany’s economic model was vulnerable because of its reliance on exports, according to Jörg Krämer, chief economist at Commerzbank.
The boost German exports had received was part of a “global phenomenon”, he said.
German gross domestic product (GDP) in the second quarter is still thought to have contracted compared with the previous three months.
The fall though is likely to have been far smaller than the 3.8 per cent first-quarter decline, and economists did not rule out a flat reading or even a return to growth when figures are released next week.
That raises the possibility that Germany could beat the UK and US in coming out of recession.
No details were given in yesterday’s export data but economists said the revival was likely to have been broad-based.
Deep scars have been left by the recession, however. June’s exports were 22.3 per cent lower than in the previous year.
Meanwhile, industrial production data for June, published separately, dashed hopes of a further rebound, falling 0.1 per cent against the previous month.
May’s figures were revised up to show a 4.3 per cent rise in production, however.
The strongest-performing sectors in recent months have been those producing investment goods and “intermediate” products, shipped for completion elsewhere.
Germany’s rebound should help lift overall prospects for the 16-state euro zone.
Italy provided a foretaste of euro-zone GDP data, also due next week, by reporting a smaller than expected 0.5 per cent contraction in the second quarter. This was roughly in line with the contraction expected for the euro zone as a whole.
Earlier this week, the European Central Bank (ECB) signalled it had become more optimistic about euro-zone prospects.
However ECB president Jean-Claude Trichet suggested the improvements were broad-based rather than led by Germany. – Copyright The Financial Times Limited 2009
