Exports a reliable source of growth for German economy

GERMAN exports continued to rise in December, increasing by three per cent on the previous month, indicating that foreign trade will support economic growth in Europe’s largest economy.

But while exports continued to rise, imports reversed the previous month’s decline to grow 4.5 per cent after a 6.2 per cent drop in November.

Consequently, the trade surplus in the world’s second-largest exporter narrowed in December to €13.5bn (£11.9bn) from €17.2bn. Since March last year, German exports have increased by more than 10 per cent.

ING’s Carsten Brzeski said: “Today’s numbers highlight once again that the German economy can almost always rely on a helping hand from the export sector. The road might be bumpy but it is the road to recovery and not a dead-end street.”

The first estimate for fourth quarter German GDP data will be released this Friday and analysts are expecting the recovery to have slowed in the final three months of 2009.

German exporters are also expected to benefit from a weaker euro, a consequence of the ongoing sovereign debt crisis that is plaguing the Eurozone.