HOPES of a sustainable recovery in Germany were dealt a sharp blow yesterday by data showing that the world’s largest exporter contracted for the first time in six years.
Although Germany exited recession in the second quarter, the annual contraction was five per cent, making the recent crisis the deepest since the Great Depression.
The fall was fueled by a 14.7 per cent slump in exports. China is expected to overtake Germany as the world’s number one exporter in the coming months.
The annual drop, released ahead of the quarterly data, suggests only meagre growth of around 0.2 per cent in the final three months of last year.
The Federal Statistics Office also said that the government budget deficit hit 3.2 per cent in 2009 – the first time in four years that the figure has exceeded the three per cent target set as part of the Maastricht Treaty in 1992.
However, the deterioration has been much more limited than in most other Eurozone countries, said ING’s Carsten Breski.