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German recession fears vanish

November 7, 2014

German companies defied sluggish global growth in September, selling more goods and services abroad than in any other month this year. The latest trade figures allay fears of Germany slipping into recession.

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Container stehen am 17.10.2012 in Hamburg
Image: picture-alliance/dpa

According to September trade figures published by the German statistics office Destatis on Friday, exports grew by 8.5 percent year-on-year, reaching a monthly volume of 102.5 billion euros ($126.8 billion). The total was the highest this year, surpassing the previous monthly export record set in July by about 1.4 billion euros.

German imports jumped 8.4 percent, compared with the same month a year ago, coming in at a total of 80.6 percent. According to Destatis data, the increase in September had offset a surprise slump by more than 5 percent in German trade in August.

Demand for German goods and services was higher in non-eurozone European countries with exports to those countries surging 13.8 percent over the year. Shipments to non-EU countries also grew significantly at a rate of 10.5 percent. By contrast, German exports to the crisis-hit eurozone were up by only 3.4 percent, the figures showed.

Recession fears vanishing

According to analysts, the strong September rebound in Germany trade appears set to shore up third-quarter growth in Europe's largest economy. After a robust first quarter in which output grew 0.8 percent, the German economy shrank 0.2 percent between April and June, raising fears of a recession.

A second successive quarter of contraction, which signifies a recession in technical terms, may, however, fail to materialize, according to economists.

Stefan Kipar, economist with Bayern LB, told the news agency Reuters that there was "definitely not going to be a recession" although the German growth dynamic will remain "subdued," reaching a rate of only 0.1 percent in the third quarter.

Unicredit analyst Andreas Rees told Reuters that the rebound in exports and rising industrial production in September will boost gross domestic product, even though only slightly.

According to latest factory figures released by the German Economics Ministry on Friday, industry output bounced back in September, rising 1.4 percent after contracting 3.1 percent in August.

uhe/ng (Reuters, dpa, AFP)