German exports declined faster than expected in April as the deepening crisis in the euro area impacted demand from European countries, data from the Federal Statistical Office revealed. Signaling the weakening of domestic consumption, imports plunged at the fastest pace in two years.
The statistical office said that exports declined 1.7 percent month-on-month in April after adjusting to seasonal and calendar variations. This was the first decline in exports since December 2011. Economists expected only a 0.7 percent fall in shipments.
Imports also declined and the drop was steeper than that of exports. Imports fell 4.8 percent from a month earlier. This was the sharpest fall since April 2010. Economists were expecting a more modest 0.1 percent fall.
The trade surplus fell to EUR 14.4 billion in April from EUR 17.4 billion in March. This was forecast to fall to EUR 13 billion. The surplus for the year-ago period amounted to EUR 10.8 billion.
The statistical agency also revealed that the current account balance was in a surplus of EUR 11.2 billion compared to EUR 11 billion surplus expected.
Though the German economy staged an impressive recovery growing 0.5 percent sequentially in the first quarter, the recent indicators suggest the Eurozone power house is losing momentum, as the crisis in the currency bloc continues unabated.
A sharp deterioration in external demand led a contraction in factory orders in April. Industrial production also declined during the month, erasing previous month's gains.
According to the latest Purchasing Managers' survey, Germany's private sector recorded the weakest performance since July 2009.
Nonetheless, the German Chamber of Industry and Commerce recently raised its 2012 growth projection as firms expect notable improvement in current situation and future prospects. The association forecast an annual economic growth of 1.3 percent this year.
The Organization for Economic Co-operation and Development forecasts Germany to grow 1.2 percent in 2012 and by 2 percent next year.
by RTT Staff Writer
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