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German Industrial Output, Exports Recover In November

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Germany's industrial production and exports recovered at a faster-than-expected pace in November, suggesting robust economic activity towards the end of 2017.

Industrial output expanded 3.4 percent month-on-month in November, reversing a revised 1.2 percent drop in October, Destatis reported Tuesday.

Growth in production was the biggest since September 2009. Output was expected to grow moderately by 1.8 percent.

Excluding energy and construction, industrial output gained 4.3 percent in November.

On a yearly basis, industrial output growth doubled to 5.6 percent from 2.8 percent in the previous month.

The economy ministry said good order intake and optimistic business expectations point to a brisk trend in the months ahead.

A separate report from Destatis showed that exports climbed 4.1 percent on month in November, in contrast to a 0.3 percent drop registered in October. The rate also exceeded the expected rate of 1.2 percent.

At the same time, monthly growth in imports accelerated to 2.3 percent from 1.8 percent in October. The growth rate was forecast to ease to 0.6 percent.

As a result, the trade surplus rose to about EUR 22.3 billion from EUR 19.9 billion a month ago.

Data brought welcome reassurance that the economy approached the end of 2017 in very good health, Jennifer McKeown, an economist at Capital Economics, said.

The economist said German GDP looks set to have risen by slightly more than the consensus forecast of 2.5 percent in 2017. A similarly strong pace of growth is expected for this year.

But with inflationary pressures subdued even in Germany, the European Central Bank is unlikely to react with interest rate hikes, the economist noted.

Destatis is scheduled to publish GDP data for the whole year of 2017 on January 11, before releasing its fourth quarter data.

Bundesbank forecast the largest euro area economy to grow 2.5 percent in 2018 and 1.7 percent in 2019.

On a yearly basis, exports advanced 8.2 percent, faster than October's 6.9 percent increase, data showed. Meanwhile, imports grew at a slightly slower pace of 8.3 percent after rising 8.4 percent.

On an unadjusted basis, the trade surplus increased to EUR 23.7 billion from EUR 22 billion in the previous year. The current account surplus came in at EUR 25.4 billion versus EUR 24.9 billion a year ago.

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