German trade surplus slips

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Berlin - Germany's powerful trade surplus shrank in February from the January level after exports fell amid an uncertain economic environment, but imports continued to grow, data showed on Wednesday.

Europe's top economy posted a trade surplus of 15.7 billion euros in February ($21.6 billion), down nine percent from 17.3 billion in January, allowing for seasonal blips, official data showed.

The dip was the result of slightly higher imports of 77.6 billion euros, against a 1.3-percent fall in exports to 93.3 billion euros, the federal statistics office Destatis said.

Germany has come under fire for its large trade surplus, with critics arguing that its economic might comes at the expense of the eurozone's weaker members.

Last year its trade surplus surged to a record high, while neighbouring France, the eurozone's second-biggest economy, still showed a huge deficit despite progress.

The German trade surplus underpins the eurozone's external accounts and is an important factor in what French Prime Minister Manuel Valls criticised on Tuesday as the undue strength of the euro which he said was penalising exporters.

France's new Socialist government has made correcting the country's chronic structural deficit a priority.

Germany's exports to the European Union, Germany's biggest trading partner, increased in February from the same month in 2013

but imports from the EU were even stronger.

The International Monetary Fund on Tuesday cut its growth forecast for the global economy, pointing to the threat from the Ukraine crisis and the slowdown in major emerging economies.

One of the main factors of growth in any economy is the balance of exports minus imports, with a surplus being a plus factor in the overall components of activity.

Analysts saw no cause for concern for now in the latest German data.

Annalisa Piazza, of Newedge Strategy, said the figures were a “sign that trade activity remains solid”.

But she said that “some technical corrections due to the still uncertain global economic scenario” could not be ruled out.

Berenberg's Christian Schulz said that Germany's strengthening domestic demand was “showing across the board”.

“Rising consumption and firming business investment are boosting imports,” he said.

He highlighted that Germany's trade with countries beyond the EU was subdued in the first two months of the year but that most emerging markets, including China, were expected to resume stronger growth in the coming months.

Nevertheless he cautioned that “more wobbles due to further market turbulence or the Crimean crisis cannot be excluded”. - Sapa-AFP



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