Carsten Brzeski, chief economist at ING, notes that Germany exports dropped by 0.4% MoM in November, from 0.7% MoM in October, while imports also dropped, by 1.6% MoM and as a result, the trade surplus widened to 20.5bn euro, from 19.0bn euro in October.
Key Quotes
“For the German economy, today’s trade data do very little to take away the fears of a technical recession. Admittedly, the final jury is still out but in the first two months of the fourth quarter, only private consumption excelled. Still, private consumption, government expenditures and investments could prevent the economy from falling into a technical recession.”
“Also, let’s not forget that despite the latest drops, the absolute levels of the most prominent leading indicators still point to growth.”
“In sum, however, latest data show that the expected rebound of the economy will take longer than anticipated. Nevertheless, we remain optimistic that it will come. Therefore, even if it happens a technical recession should not leave any marks on the labour market but should be the very final wake-up call to step up investments and structural reforms.”
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