Published On: Tue, Aug 8th, 2017

EUROZONE ON THE BRINK: Germany imports PLUNGE to lowest level since 2009, figures show

Exports from Europe’s biggest economy fell by 2.8 per cent, the biggest drop since August 2015, the Federal Statistics Office said.

Adding to Germany‘s woes, imports plunged by 4.5 per cent in the same month, the biggest drop since January 2009.

The shocking data, released earlier today, drove the country’s seasonally adjusted trade surplus to a 10-month high of €21.2billion (£19.2bn).

The figures will embarrass Chancellor Angela Merkel, who widely expected to win a fourth term in a national election next month.

She is campaigning on a platform of economic stability, as well as increased spending on infrastructure, defence and security.

Her government is now likely to face pressure boost spending on investments as a way to support the economic recovery in other countries.

Officials expect Germany’s economy to grow 1.5 per cent this year, down from 1.9 per cent in 2016, which was the strongest rate in five years.

Construction and state spending have already provided most of the growth impulse, along with consumption.

This has been supported by the low interest rate environment created by the European Central Bank (ECB).

ING Bank economist Carsten Brzeski said: “Even though this morning’s trade data add to a disappointing month for German industry, we don’t think that the German economy has suddenly passed its peak.

“Instead, strong confidence indicators point to a continuation of the recovery. 

“Also, some kind of investment boost after the elections combined with the gradual recovery of private investment already this year should extend an already mature business cycle of the German economy well into 2018.”

Following the release of the figures, the Munich-based Institute for Economic Research said it expected the economy to grow 0.8 per cent in the second quarter.

Industrial orders rose twice as much as expected in June, supported by strong domestic demand.

And while industrial output fell in June, they grew in the second quarter overall.

Additional reporting by Monika Pallenberg

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