German Exports Keep On Truckin' as Nation Lurches Toward Recession

11 August 2008

BERLIN: With an export performance in step with the spirit of Robert Crum's famous 1968 hippie cartoon, Germany continues to ship its products to an eager world in volumes undiminished by the global economic slowdown.

The nation's export trade, particularly with Asia and the Middle East, posted a better-than-forecast 4.2% increase in June, despite growing economic worries sparked by surging inflation and the strong euro.

But local economists are voicing uncertainty that even this Viagran performance can stem recession.

Says Commerzbank's Matthias Rubisch: "[The slowdown] isn't just limited to Germany. The economy in other western European nations is rapidly losing momentum as well.

"Practically all the large western European countries are already at, or close to, the brink of recession. Germany's high dependence on exports means that it cannot escape this development."

All of which has eroded the nation's consumer confidence, slipping in July to a five-year low, while one month earlier retail sales also fell sharply.

And last week, the Financial Times quoted a German government official's opinion that the Q2 growth rate would be "in the magnitude of minus one percent." 

All of which is in sharp contrast to the first quarter when the country's economy notched its fastest growth rate in twelve years.

Data sourced from Deutsche Welle (Germany); additional content by WARC staff