German exports up; China emerges as world's top trader (Correction)

Feb 9, 2010, 14:38 GMT

Berlin - German exports increased in December by a surprise 3 per cent, to record their fourth consecutive monthly gain and their first annual rise since October, the statistics office said Tuesday.

Seasonally-adjusted German exports increased by 3.4 per cent in December compared with the same month in 2008, adding to hopes of a pickup in global trade as the recession retreats.

Analysts had expected exports to stagnate in December. The December trade surplus narrowed to 13.5 billion euros (18.5 billion dollars) from the 17.8 billion euros in November.

However, Tuesday's data also confirms that Germany last year lost its title of the world's leading export nation to China, after exports from Europe's biggest economy posted their steepest fall in six decades.

Official figures from Beijing showed China's exports came in at 1,201 billion dollars last year, ahead of the total value of German exports, which was 1,121 billion dollars.

What is more, the trade data is likely to add to expectations that Germany's export machine is now the key driving force behind the nation's emergence from its biggest economic downturn in a generation.

'Today's numbers highlight once again that the German economy can almost always rely on a helping hand from the export sector,' said ING Bank economist Carsten Brzeski. 'The road might be bumpy but it is the road to recovery and not a dead-end street.'

The German economy is expected to slow as it entered the new year, with analysts predicting that 2009 fourth-quarter economic growth to be released Friday will show a meagre expansion rate of just 0.2 per cent.

This comes after the economy notched up a healthier 0.7 per cent growth rate during the third quarter.

The latest trade data comes in the wake of a round of official figures which have painted a mix picture of the country's economy as 2010 got underway.

While industrial production slumped by 2.6 per cent in December, factory orders dropped by 2.3 per cent but after the ministry revised upwards the November figure to show an increase of 2.7 per cent. This compared with an original estimate of a 0.2-per-cent rise in November.

German unemployment jumped in January, the labour office said, amid concerns about the threat of a new wave of job cuts undercutting private consumption in the country.

The numbers out of work in seasonally adjusted terms rose by 6,000 to 3.429 million, consequently bringing to an end six consecutive monthly falls and pushing up the jobless rate to 8.2 per cent.

That said, however, German business leaders have entered the new year on a positive note, with a key industry confidence survey hitting an 18-month high in January.

The German government expects the nation's economy to expand by 1.4 per cent in the coming 12 months after it contracted by a dramatic 5 per cent last year in the wake of the global recession.

However, many economists think the country's growth rate could top 2 per cent this year as global demand for German goods picks up speed. Berlin expects exports to rebound by 5.1 per cent this year.

In the meantime, the statistics office said imports slipped by 17.2 per cent to 667.1 billion euros compared with December 2008.

However, month-on-month imports rose by a strong 4.5 per cent raising hopes that the nation's domestic economy remains on a recovery track.

For the year 2009, however, exports slumped by 18.4 per cent with imports dropping by 17.2 per cent.