German exports rise in May 2020 as lockdowns ease

FRANKFURT AM MAIN, Germany – German exports rose sharply in May as coronavirus containment measures eased, official data showed on Thursday, July 9, adding to signs of a recovery in Europe’s top economy even if trade remains well below pre-pandemic levels.

Exports climbed 9% to 80.3 billion euros ($91 billion) compared with April, when they suffered their biggest plunge since records began, according to federal statistics office Destatis.

Imports grew at a slower clip of 3.5% month-on-month, widening Germany’s trade surplus to 7.6 billion euros in seasonally adjusted terms.

Analysts surveyed by Factset had predicted a stronger uptick in foreign trade, suggesting that German firms met with weaker than expected demand as they reopened after weeks of lockdown.

Compared with a year earlier, exports were down almost 30% while imports were nearly 22% lower.

“German exports staged a first comeback, but still have a long way to go before returning to pre-crisis levels,” said ING bank analyst Carsten Brzeski.

Germany began loosening its coronavirus restrictions earlier than most countries, but the export powerhouse remains highly vulnerable to what is happening in other virus-stricken economies.

Exports to China, which is further along in battling the pandemic, were down only 12.3% compared with May 2019. 

But those to the hard-hit United States slumped by 36.5% and exports to Britain tumbled by nearly 47%.

Brzeski said Germany would have to rely heavily on domestic demand to power its coronavirus recovery, with the help of the government’s massive coronavirus stimulus package.

“If it succeeds, COVID-19 could have been an important driver in finally getting a more balanced growth model of the German economy,” he said. – Rappler.com