Bundesbank puts dampener on German trade optimism

Fri Jun 7, 2013 6:28am EDT
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By Michelle Martin and Sakari Suoninen

BERLIN/FRANKFURT (Reuters) - German trade activity rose sharply in April, but a cut in the Bundesbank's growth forecast dampened hopes that Europe's largest economy might be gaining momentum.

Exports rose 1.9 percent and imports by 2.3 percent, Federal Statistics Office data showed on Friday, offering some encouragement to other euro zone states aiming to export their way out of the region's crisis.

But Germany's central bank said that, after a second-quarter surge, the economy could slow considerably, cutting its 2013 growth forecast by 0.1 percentage points to 0.3 percent and its estimate for 2014 growth to 1.5 percent from 1.9 percent.

The Bundesbank's 2013 prediction brought it into line with the International Monetary Fund, which halved its forecast for Germany on Monday.

The cut was "due mainly to downward revisions with regard to the external environment", the Bundesbank said, forecasting that exports could fall by 0.8 percent from last year.

Capital Economics economist Jennifer McKeown called the trade data encouraging but said a recent rise in the euro "doesn't bode well for Germany given that it exports quite a lot to outside the currency area."

Imports from the currency bloc rose a healthy 5.4 percent in April, the statistics data showed.

But the overall German picture on imports was still very weak due to a lack of investment, McKeown said, so "any hopes that Germany is about to provide a massive boost to peripheral (euro zone) countries are far too optimistic."   Continued...

Cars for export stand in a parking area at a shipping terminal in the harbour of the German northern town of Bremerhaven, late October 8, 2012. REUTERS/Fabian Bimmer