Facing its deepest recession since World War Two, the big question is how fast Germany’s export-oriented economy can recover with the easing of a shutdown that halted production and stunted retail activity.
Seasonally adjusted exports plunged 24% on the month, far more than economists expected, while imports slid 16.5%. The trade surplus shrank to 3.2 billion euros, the Federal Statistics Office said on Tuesday.
Economists polled by Reuters had expected exports to fall by 15.6% and imports to slide by 16%. The trade surplus was expected to come in at 10.0 billion euros ($11.3 billion).
“Little is left of the last decade’s export boom,” said Alexander Krueger, economist at Bankhaus Lampe.
A recovery may have already started due to a loosening of the lockdown and reopening of borders, he said. “But the road out of the corona trough is long, rocky and above all uncertain, especially for foreign trade.”
The BDI industry association sees exports sliding by about 15% this year and imports by some 12%.
Desperate to speed up recovery, the government last week announced a 130 billion euro ($146 billion) stimulus package to help boost domestic demand. That comes on top of 750 billion euros worth of measures announced in March.
But the government still expects the economy to shrink by 6.3% this year and, in a sign of the scale of the crisis, about a quarter of German companies needed liquidity aid last month, the Ifo economic institute said.
The pace of recovery also depends on European neighbours and trade partners such as China and the United States, as well as on logistics such as open borders and supply chains.
Exports to France and the United States, hit hard by the coronavirus, slid by about 48% and 36% respectively, while those to China, which has started to emerge from the crisis, fell by 12.6% in April, the Office said.
German industrial goods in April suffered their biggest drop since 1991, data last week showed, but the economy ministry said the worst was probably over.
“April may have marked the low point and exports have been pointing upwards since May,” said Stefan Kooths of the IfW institute in Kiel. “But the recovery is still too weak to quickly make up for the sharp declines,” he added.
($1 = 0.8874 euros)
