German Exports Suffer March Slump

Germany witnessed a 5.2% decline in exports in the month of March. The larger-than-expected drop was caused by lower demand from the EU, US and China.Germany witnessed a sharp export decline of 5.2% in March compared to February, according to data published by the federal statistics agency Destatis on Thursday.

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The substantial decline, where Germany only exported €129 billion ($142.5 billion) worth of goods in March, indicates a sign of fragility in Europe's biggest economy.

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The drop came after two straight months of growth.

A concerning export decline

The setback was suffered due to weaker demand from key markets in the EU, US and China.

Exports to the EU states fell by 6.2% while those to China fell by 9.3%.

The United States remained a top consumer by importing €‎12.5 billion worth of German goods in March, representing a dip of 10.9% from last month.

Countries outside the EU imported 4% less from Germany.

Germany posted official data on Friday, which reflected stagnated growth in the first quarter, despite expectations for a slight rebound.

Economist: German exports will recover

The global economy is "not running smoothly," and export-heavy Germany is "feeling the effects of this," Thomas Gitzel, the chief economist of VP Bank, told Reuters news agency.

Analysts have warned that an economic slowdown in the US could hurt Europe's biggest economy.

"High inflation rates, rising interest rates and the geopolitical uncertainties that have grown with the war in Ukraine are affecting the investment mood of companies," he said.

However, Alexander Kruger, the chief economist at the Hauck Aufhauser Lampe Privatbank, told Reuters that Berlin's setback is manageable.

"Export levels are high, material shortages are decreasing and export expectations are improving," he said.

ns/sms (AFP, Reuters)

(The above story first appeared on LatestLY on May 04, 2023 03:10 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).