Trade wars and Brexit fears sap German export surplus

Trade wars and Brexit fears sap German export surplus

FRANKFURT AM MAIN: Germany's trade surplus narrowed last year compared with 2017, official data showed Friday (Feb 8), with trade wars making themselves felt even as both imports and exports hit record highs.

Europe's powerhouse economy exported 227.8 billion euros (US$258.3 billion) more than it imported in 2018, federal statistics authority Destatis said.

That figure was just over 20 billion euros short of 2017's level, as 5.7-per cent growth in imports outpaced a 3.0-per cent increase in exports.

In absolute terms, exports hit a record high of more than 1.3 trillion euros, as did imports with almost 1.1 trillion.

Figures for December alone were gloomier, with exports down 4.5 per cent year-on-year, at 96.1 billion euros, while imports were flat at 82.1 billion.

Recent months have seen a slowdown in global trade as US President Donald Trump's commercial conflicts, especially with China, begin to bite.

Germany has been hit directly by Washington's smaller transatlantic showdown with Brussels, but also by knock-on effects from the US-Chinese spat as well as mounting fears of a hard Brexit throttling trade with vital partner Britain.

Exports to the country's eurozone neighbours also fell in December as the economy slowed in the 19-nation single currency zone.

Nevertheless, ING Diba bank economist Carsten Brzeski noted that "despite all trade war fears, the export sector didn't just grow in 2018 but probably contributed positively to the economy's fourth quarter GDP growth."

"Looking ahead ... the risks and uncertainties from outside the eurozone are clearly the make-it-or-break-it factor for the export sector," he added.

Source: AFP/aa