Export plunge

The German Federal Statistical Office published the report showing that exports to European Union countries were 24 percent lower than during the same period last year, while exports to countries outside of the EU were nearly 22 percent lower on average.

The Wiesbaden-based office said exports to some countries within the EU was better than to others. Export volumes to Ireland, Spain, Hungary and the UK were "above average", according to official figures released on Tuesday.

Outside of the EU, "very sharp falls were observed for deliveries to Russia and to Turkey,” the report said. Exports to the US and Japan were down 27 and 23 percent respectively, the report added.

The latest data point to the prolongation of a gloomy outlook for the world’s largest exporter.

Exports rebounded in July

The second quarter export figures come close on the heels of relatively encouraging data published earlier this month by the Federal Statistics Office. Germany’s trade surplus jumped 12 percent in July and exports rose by more than two percent over the previous month to over 70 billion euros.

Analysts said that the July trade surplus was driven largely by a solid surge in exports to Asia, in particular.

No quick recovery in sight

On Monday, the head of Germany’s central bank warned that the economy, battered by the financial market chaos, would not recover to its pre-crisis levels for another four years.

“The economic recovery will take a while. The German economy will not reach the level of prosperity it enjoyed in 2008 until, probably, 2013," Bundesbank President Axel Weber told the Frankfurter Rundschau newspaper. The road ahead would remain “bumpy", he added.

Nevertheless, he said that Germany had exited the "free fall" phase.

Economy on the mend

Notwithstanding the drastic fall in exports, the German economy emerged from recession during the second quarter of this year, much earlier than previously forecast.

ING Bank economist Carsten Brzeski said Germany's economic performance in recent months was a positive sign for the future.

"For the near term, the outlook for the German economy looks bright. It has the potential to lead Europe out of the recession," he said.

However, the rollout of extensive stimulus packages designed to help the country out of the crisis, has left gaping holes in the national budget.

Since the beginning of the year, Germany has built up a deficit of over 17 billion euros, compared to a budget surplus of seven billion euros during the same period last year. This amounts to around 1.5 percent of gross domestic product (GDP) – well within the three percent limit for the 16 countries that use Europe's common currency, the euro.

glb/rb/dpa/Reuters/AFP

Editor: Rick Demarest