Germany's trade surplus narrowed to its lowest level in over seven years in January as exports fell sharply, suggesting Europe's largest economy will suffer another large contraction in the first quarter of 2009.
Preliminary figures from the Federal Statistics Office today showed the seasonally adjusted trade surplus came in at €8.3 billion, smaller than the 10.0 billion euros forecast in a Reuters poll last week.
The Statistics Office said the January surplus was the lowest since November 2001, when it stood at €7.35 billion.
The euro dipped below $1.27 after the data.
German gross domestic product (GDP) declined by 2.1 per cent quarter-on-quarter in the last three months of 2008, its worst result since reunification in 1990.
A breakdown of the trade figures showed exports fell by 4.4 per cent month-on-month in adjusted terms, compared with the 4.0 per cent drop forecast by economists.
Imports fell by 0.8 per cent, compared to a forecast for a decline of 3.6 per cent month-on-month. It was the fourth consecutive monthly drop for both imports and exports.
Germany has been the world's largest exporter of goods since 2003, but the economy's reliance on foreign sales has proved a weakness as global demand for its traditionally competitive capital goods and engineering products plummets.
Unadjusted data showed the decline in foreign demand for German goods was broad-based, with exports to the euro-zone falling 17.4 per cent, those to the broader European Union sliding 18.7 per cent and sales outside the EU down 24.5 per cent.
In December, Germany's trade surplus stood at €11 billion, revised from the €10.7 billion reported last month.
Reuters