German exports collapsed at its fastest pace on record as global economic recession reduced demand across the world, official data showed Thursday.
According to provisional data released by the Federal Statistical Office, exports declined at a faster pace of 10.6% month-on-month in November after falling only 0.6% in October. Monthly fall in exports was the biggest since German reunification in 1990.
Compared to the previous year, exports slumped 11.8% following an increase of 1.3% in the preceding month. Total value of commodities exported in November was EUR 77.1 billion.
The export-driven economy dispatched commodities to the value of EUR 48.4 billion to the Member States of the European Union. Compared with November 2007, dispatches to the EU countries decreased 14%. Shipments to euro area declined 12.9% to the value of EUR 32.3 billion. Commodities to the value of EUR 16.0 billion were dispatched to EU countries not belonging to the euro area. This represents a decrease of 16.1%. Exports to third countries dropped 7.8%.
A clearer picture of the German exporting sector in the days ahead would be available when the Federal Ministry of Economics and Technology releases its factory order data for November later today. Economists forecast factory orders to slump 20.1% year-on-year. On a monthly basis, demand for German factory products is expected to fall 1.9%.
Joerg Kraemer, Chief Economist at the Commerzbank AG said, "This is another sign that Q4 GDP will come in really bad and supports those within the ECB council who prefer to cut rates already next week."
The largest Eurozone economy slipped into recession in the third quarter for the first time in five years by contracting 0.5% in the third quarter, following a decline of 0.4% in the second quarter. The growth outlook is grim. The Munich-based Ifo Institute for Economic Research had said the German economy would likely shrink 3.5% on an annual basis in the fourth quarter.
Imports dropped 5.6% on a monthly basis following a 3.7% fall in October. Year-on-year, imports declined 0.9% after rising 5.2%.
The foreign trade balance showed a surplus of EUR 9.7 billion in November, narrowing from EUR 19.4 billion surplus in the previous year and EUR 16.4 billion surplus in October. Upon calendar and seasonal adjustment, the foreign trade balance recorded a surplus of EUR 10.7 billion in November 2008.
According to provisional results of the Deutsche Bundesbank, the current account of the balance of payments showed a surplus of EUR 8.6 billion in November 2008. A year ago, the German current account had shown a surplus of EUR 19.7 billion.
The balance of services was a shortfall of EUR 0.4 billion, factor income (net) showed a surplus of EUR 4.2 billion, current transfers deficit was EUR 3.7 billion and supplementary trade items recorded a deficit of EUR 1.2 billion.
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