BERLIN- German exports rose in December as solid trade with China and the United States helped Europe’s largest economy as it struggles to grow under the restrictions of a lockdown aimed at suppressing the COVID-19 case load.
Seasonally adjusted exports edged up 0.1 percent on the month after an increase of 2.3 percent in November, the Federal Statistics Office said on Tuesday. Imports fell 0.1 percent after an increase of 5.4 percent in the prior month.
The trade surplus expanded to 16.1 billion euros, but in 2020 as a whole the surplus fell for a fourth year running.
Joerg Zeuner at Union Investment expected stronger foreign trade this year, with exports rising “in the high single-digit percentage range”.
“They should benefit from the expected economic recovery in the euro area as well as from dynamic growth in important customer countries such as China and the USA,” Zeuner said.
In December, exports to China increased by 11.6 percent on the year. Those to the United States rose by 8.4 percent, the Office said.
The robust trade with China and the United States, contrasted with weakness from Britain.
Exports to the United Kingdom decreased by 3.3 percent in December and imports from the United Kingdom fell by 11.4 percent.
Germany’s DIHK Chambers of Industry and Commerce said Britain’s departure from the European Union was having a negative impact on German-British business and a trade agreement could only partly compensate for the downturn.
Sebastian Dullien at the IMK economic institute said: “Trade with the United Kingdom is expected to decline noticeably again in the first months of 2021. Supply bottlenecks for chips are currently hampering car production and thus dampening exports.”
But Dullien added: “Overall, the global economy is expected to pick up in the coming months and exports are also expected to grow more strongly again”.
The German government last month slashed its GDP growth forecast to 3 percent this year, a sharp revision from last autumn’s estimate of 4.4 percent. This means the economy probably won’t reach its pre-pandemic level before mid-2022.
Germany’s industrial sector avoided a contraction in December despite coronavirus lockdowns at home and abroad as strong demand from China helped export-oriented manufacturers. – Reuters