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German trade data hides downbeat outlook

Thursday, June 06, 2013 - 01:45

June 6 - German trade activity rose in April, but hopes Europe's largest economy might be gaining momentum were dampened when the Bundesbank cut its growth forecast. Joel Flynn reports.

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Some good news for Germany but it's not all positives. Trade activity in Europe's powerhouse economy rose sharply in April, but the Bundesbank has cut growth forecasts. That's dampened hopes Germany's economy might be gaining momentum. Simon Derrick, an analyst at Bank of New York Mellon, said he's not surprised. SOUNDBITE: BNY Mellon FX Analyst, Simon Derrick, saying (English): "I think at the moment we're definitely getting some signs that there are a little bit of positive numbers there, but I think it's way too early to really to start talking about a full scale recovery. I mean right now Europe seems far too mixed overall. I, frankly, think that we're going to lumber on with moderate growth for a fair period of time before we start to see any real signs of life." Exports rose 1.9 percent and imports by 2.3 percent, according to Federal Statistics Office data. But Germany's central bank said after a second-quarter surge the economy could slow considerably. It's now brought its forecast down 0.1 percent to 0.3 percent for 2013 and cut next year's forecasts as well. That's after the IMF made the same prediction last week. Derrick says it's a reflection of the bigger global picture. SOUNDBITE: BNY Mellon FX Analyst, Simon Derrick, saying (English): "I think the fact that we've got a slowdown taking place in China in the Far East and particularly in China obviously presents a threat to Germany and to the euro zone generally in terms of exports. I'm actually concerned a little bit about the export number. On the flipside it's fair enough to say that we do have a recovery taking place in the U.S. but we've still got, relatively speaking, a cheap dollar and an expensive euro, so I'm not exactly expecting the numbers to really shine in the near future." A slowdown in China is bad news for German firms which are are increasingly looking eastward to boost sales.

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German trade data hides downbeat outlook

Thursday, June 06, 2013 - 01:45