German exports plunge by largest amount in 5-1/2 years

Containers are loaded onto a container ship at a shipping terminal in the harbour in Hamburg on Sept 18, 2014. German exports slumped by 5.8 per cent in August, their biggest fall since the height of the global financial crisis in January 2009,
Containers are loaded onto a container ship at a shipping terminal in the harbour in Hamburg on Sept 18, 2014. German exports slumped by 5.8 per cent in August, their biggest fall since the height of the global financial crisis in January 2009, in yet another sign that Europe's largest economy is faltering amid broader euro zone weakness and crises abroad. -- PHOTO: REUTERS

BERLIN - German exports slumped by 5.8 per cent in August, their biggest fall since the height of the global financial crisis in January 2009, in yet another sign that Europe's largest economy is faltering amid broader euro zone weakness and crises abroad.

The Federal Statistics Office said Thursday that late-falling summer vacations in some German states had contributed to the fall in both exports and imports, but the figures still painted a gloomy picture for Germany following steep drops in industrial orders and output data earlier in the week.

They are likely to intensify a debate over whether Chancellor Angela Merkel's government should be ratcheting up public investment in infrastructure instead of prioritising deficit reduction.

The data showed seasonally adjusted imports falling 1.3 per cent on the month, at odds with expectations in a Reuters poll for an increase of 1.0 per cent. Exports had been expected to fall by a more modest 4.0 per cent after rising 4.8 per cent in July.

The trade surplus stood at 17.5 billion euros, down from 22.2 billion euros in July and less than a forecast 18.5 billion euros.

Germany's economy had a strong start to the year but shrank by 0.2 per cent in the second quarter. Evidence is mounting that it barely grew in the third quarter and some economists are forecasting another contraction in that period, which would amount to a technical recession.

On Tuesday, the IMF slashed its 2014 growth forecast for Germany to 1.4 per cent from 1.9 per cent, and its 2015 forecast to 1.5 per cent from 1.7. Later on Thursday a group of leading economic institutes is poised to sharply cut its forecasts for German growth.