FRANKFURT: Germany’s trade surplus surged to a record high in 2013 despite flagging in the last few months, but France still showed a huge deficit despite progress, data showed yesterday.
Germany, Europe’s biggest economy, notched up a trade surplus of ¤198.9bn ($270bn) in 2013, the highest since foreign trade data have been compiled.
At the same time, France, the eurozone’s second-biggest economy, pared back its deficit by ¤6bn. That that still left France with a deficit of ¤61.2bn, according to French Trade Minister Nicole Bricq.
In Germany, however, analysts took a mixed view of the latest German figures, saying that in some ways they were disappointing.
A trade surplus is a vital factor of growth in an economy. The German surplus, built in large part on medium-sized niche companies, goes a long way to explaining the wealth and power of the German economy.
But France has developed a chronic structural deficit over many years and this is a severe drag on the economy. Analysts say it reflects falling competitiveness, and a relative shortage of powerful small companies and undue reliance on mid-range products.
Correcting this is a top priority for the Socialist-Green French government, which is moving towards reducing charges on companies, somewhat along the lines of reforms in Germany 10 years ago, and cutting deeply into public spending.
French Trade minister Bricq said 2014 would mark a year of “recovery and rebound”.
“After a difficult year in 2013, the economic lights are turning to green, particularly in the eurozone where we do 47 percent of our trade,” she said.
Germany has come under fire for its booming trade surplus, with critics arguing that its economic prowess comes at the expense of the eurozone’s weaker members.
The critics argue that Germany needs to boost domestic demand and so help its EU partners by spurring export-driven growth in their economies rather than continue to rely mostly on its own exports for growth.
But Berlin has persistently dismissed the criticism, arguing that the high surplus reflects the competitiveness of German firms. The 2013 trade data appeared to support this.
Total exports slipped by 0.2 percent over the year as a whole and exports to the euro area fell by as much as 1.2 percent, while imports from the eurozone were only fractionally lower, Destatis calculated.
Exports to the wider EU edged up by 0.1 percent while imports from the EU grew by 0.8 percent.
A closer look at the monthly data showed that export momentum — traditionally the main driver of German growth — has also been tailing off at the end of the year, In raw or unadjusted terms, the trade surplus narrowed to 14.2 billion euros in December from ¤19.1bn in November.
And in seasonally adjusted terms it decreased to ¤18.5bn in December from ¤18.9bn in November, with exports falling faster than imports.
Combined with falling industrial output and factory orders data for December, the trade numbers were “disappointing,” said Natixis economist Johannes Gareis.
AFP
