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German exports increase by 18.5 percent in 2010

German exports increase by 18.5 percent in 2010

February 9th, 2011 by GEIR MOULSON, Associated Press in News

BERLIN (AP) - German exports rose 0.5 percent on the month in December, rounding out a year of strong growth that saw an overall increase of 18.5 percent, official data showed Wednesday.

Germany, which has Europe's biggest economy, exported goods and services worth 81.7 billion ($111.3 billion) in December, the Federal Statistical Office said. For the whole of 2010, exports totaled 951.9 billion.

Export growth has been fueled by strong demand from emerging economies for German products, including cars and industrial machinery.

For the whole of 2010, Germany's exports to countries outside the European Union surged by 26 percent to 381.2 billion, while exports to other nations in the 17-nation eurozone increased by a less stellar 12.7 percent to 386.2 billion.

The increase in exports last year kick-started the German economy, which bounced back to grow by 3.6 percent - its fastest pace since reunification two decades ago.

Exports have bounced back from an 18.4 percent drop in 2009 that saw Germany lose its crown as the world's leading exporter to China - a title Beijing is expected to keep. Over recent months, strengthening domestic demand also has bolstered the recovery.

December's monthly export increase was the second 0.5 percent rise in a row, a healthy performance but much slower than the rates seen earlier last year.

A slowdown in export growth was widely expected, "but this does not mark the end of the export success story," said Alexander Koch, an economist at UniCredit in Munich.

An improved outlook for some eurozone and central European countries has bolstered German manufacturers' export expectations, Koch said.

"The preconditions for a continuation of the broad-based upswing remain intact," despite the effects of harsh winter weather that affected construction in December, he added.

Economy Minister Rainer Bruederle said that "our upswing stands firmly on two legs: foreign trade and domestic demand." That's a point German politicians have been keen to stress following criticism in recent months of the country's large trade surplus.

Imports dropped by more than 17 percent in 2009 compared with the previous year.

Last year, they expanded by 20 percent to 797.6 billion, a slightly faster growth rate than that of exports. Even so, Germany's foreign trade surplus for 2010 was up to 154.3 billion from the previous year's 138.7 billion.

In December, imports were down 2.3 percent on the month at 69.8 billion.

Underlining the optimistic outlook, Germany's Chambers of Industry and Commerce on Wednesday forecast economic growth this year of 3 percent.

That's up from the 2.4 percent the group forecast in October and above the government's official prediction of 2.3 percent.

A survey of some 28,000 firms by the group showed that 46 percent reported improving export expectations and only 5 percent expect to export less.

Meanwhile, 44 percent assessed their current business situation as good and another 46 percent as satisfactory in the survey, conducted in December and January.