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Germany’s export boom slowed by Covid-19

Germany’s export boom was slowed by the Covid-19 pandemic, the German Federal Bank (Bundesbank) noted.

In April, Germany’s exports to the world totaled 108.9 billion euros, a year-on-year drop of 7.9 percent.

At the same time, German imports totaled 91.6 billion euros, a decrease of 4.5%, at the annual rate.

With this, Germany recorded a surplus of $ 17.4 billion.

Foreign trade (Euro billion)

According to the latest Bundesbank report, the unmatched speed with which the pandemic paralyzed the German economy and the containment measures taken are causing considerable uncertainty in terms of evaluating the development of the economy.

Export

Many of the economic indicators based on hard data, that is, not obtained from surveys, are available so far only for January and February. Therefore, they do not yet reflect the economic costs of the pandemic or of fighting it.

Rather, they show that the German economy seemed at the beginning of the year to have overcome its prolonged slowness.

In particular, output in the export-oriented industry experienced strong growth for the first time since mid-2018, and industrial company order books also showed notable improvement.

Already robust, nationally oriented sectors have experienced further expansion during this period. Production in the main construction sector increased strongly, with the weather as a contributing cause, and retail sales and turnover in the hotel and restaurant sector were also higher due to sustained positive developments in the labor market.

Covid-19 factor

According to the Bundesbank, there was a damping impact on exports to China, whose economy was the first to experience the large-scale pandemic. Seasonally adjusted nominal imports of goods decreased substantially in February 2020 (-1.5 percent).

Here too, the decline in trade with China had a major impact. Taking January and February together, the decrease in imports, at 0.75%, was less overall compared to the previous quarter.

However, after adjusting for price effects, imports of goods remained unchanged during the quarter. This discrepancy is due to the sharp decrease in energy prices towards the end of the period under review.

A drop in German exports is expected for April, data that will be known on June 6.

 

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