German exports tumble

German exports fell at their fastest rate in nearly three years in December and imports unexpectedly dropped, adding to signs that the euro zone sovereign debt crisis hit the region's top economy hard in the fourth quarter. However, the data from the Federal Statistics Office also showed German exports notched up a fresh record for all-2011 and economists said forward-looking surveys suggested the economy was already back on track after an apparent brief contraction.
"Germany suffered more than expected from the weak global demand towards the end of the year," said Commerzbank economist Ulrike Rondorf, adding that the strong decline was partly due to calendar effects. Wednesday's data showed seasonally-adjusted exports fell 4.3 percent in December, the steepest decline since the height of the financial crisis in January 2009. The median forecast in a Reuters poll of economists was for a drop of just 1.0 percent.
A breakdown of year-on-year data showed exports to the euro zone dropping 3.3 percent, despite an overall 5.0 percent rise. The drop in exports helped narrow the trade surplus to 13.9 billion euros from a revised 14.9 billion euros the month prior, missing a consensus forecast for a dip to 14.0 billion euros.
"The data from December means that the official fourth quarter estimate for an economic contraction of 0.25 percent needs to be revised downward," said Dekabank's Andreas Scheuerle. Germany's export-driven economy recovered quickly from the 2008/09 financial crisis but the euro zone's debt troubles and a global slowdown have cast a shadow over its growth outlook.
A first official estimate for gross domestic product in the fourth quarter points to a slight contraction but December data has been worse than expected. Industrial output posted its biggest fall in December since the depth of the financial crisis at the start of 2009, the Economy Ministry said on Tuesday, underperforming forecasts by a wide margin.
Economists had hoped domestic demand would support the economy during this period of weakness and imports had been forecast to rise 0.6 percent, but they dropped by 3.9 percent. Full-year figures showed German exports exceeding the key trillion euro mark in 2011, at 1.060 trillion euros. Imports also reached a record 902.0 billion euros.