Germany's exports increased unexpectedly in April and industrial production rebounded at a faster-than-expected pace suggesting that the economy has not lost its steam.
Exports rose a seasonally and calender-adjusted 1.9 percent month-on-month in April, faster than previous month's 1.3 percent increase, provisional data from Destatis showed Monday.
This was the third consecutive rise in exports and came in contrast to a 0.4 percent drop forecast by economists.
Meanwhile, imports fell 1.3 percent in April from the prior month, in contrast to economists' expectations for a 0.5 percent rise. It was the first decrease in three months. In March, imports grew 2.4 percent.
Elsewhere, industrial production expanded 0.9 percent month-on-month in April, reversing a revised 0.4 percent fall in March, another report showed today. It was larger than an expected 0.5 percent increase and also the biggest growth seen so far this year.
Factory orders increased 1.4 percent in April, also the fastest growth since December, data released last week showed.
On a yearly basis, industrial production growth accelerated to 1.4 percent in April from 0.2 percent in March and beat expectations for a 0.9 percent increase.
With low inflation and a fairly healthy labor market supporting domestic demand, while the weak euro helps exporters, the economy might grow by around 2 percent this year, James Howat, a European economist at Capital Economics, said.
But it is suspected that growth will slow to about 1.5 percent next year as the boost from a weaker euro fades.
Bundesbank last week lifted its real growth outlook to 1.7 percent this year from 1 percent as the economy returned to a growth path with strength stemming from domestic demand. For next year, growth is expected to be 1.8 percent.
Excluding energy and construction, industrial output advanced 0.7 percent on month in April. Energy production gained 1.4 percent in April and production in the construction sector grew 1.3 percent.
Within industry, the production of capital goods increased 1.5 percent and the production of intermediate goods gained 0.7 percent. Meanwhile, a decrease of 0.9 percent was logged for consumer goods production.
In April, the trade surplus rose to a seasonally adjusted EUR 22.3 billion from EUR 19.4 billion in the preceding month.
On an annual basis, exports increased at a slower pace of 7.5 percent in April, following a 12.5 percent surge in March. Likewise, growth in imports eased to 2.8 percent from 7.2 percent.
Consequently, the trade surplus decreased to EUR 22.1 billion in April from EUR 23.1 billion in the prior month. Economists had expected a EUR 19.2 billion surplus for the month.
The current account surplus narrowed to EUR 19.6 billion in April from EUR 27.3 billion in March. A year ago, the surplus totaled EUR 16.9 billion.
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