Germany defies crisis with record trade figures

Germany posted record figures for both imports and exports Wednesday, prompting analysts to predict Europe's top economy would avoid a recession as it continued to defy the eurozone crisis. The value of German exports hit 98.9 billion euros ($128.4 billion) in March and imports amounted to 81.5 billion euros, according to fresh data from federal statistics office Destatis. "These were the highest monthly figures ever recorded for exports and imports (both previous all-time highs recorded in March 2011)," commented Destatis. Germany's trade surplus grew to 17.4 billion euros. "Overall, the indicators clearly confirm our view that the German economy did not slide into a technical recession at the turn of the year," said Alexander Koch, an analyst at Unicredit. Another economist, Ulrike Rondorf at Commerzbank, said: "The competitive German economy is profiting from the revival of global trade after a soft patch at the end of 2011." Germany has proved highly resilient to the turmoil caused by the eurozone sovereign debt crisis, with business confidence remaining high and industry and trade staying buoyant. On Tuesday, data showed industrial output rose sharply in March, also driving analysts to predict Germany would dodge a technical recession, defined as two consecutive quarters of economic contraction. The economy shrank by 0.2 percent in the final quarter of 2011, sparking fears that Germany would succumb to the turbulence surging through the eurozone. Figures for the first quarter of this year are expected to be released on May 15, with analysts forecasting a positive number, although only a fractional gain. Nevertheless, the German data do show the impact of the crisis, with exports being held high by trade to countries outside Europe. Of the 98.9 billion euros exported in total, 57.0 billion went to fellow EU countries, a decline of 2.8 percent compared to the same period the year before. Exports to the other 16 EU countries that share the euro declined even more dramatically, down 3.6 percent on the previous year. However, exports to "third countries" soared by 6.1 percent on an annual basis. Over the three months from January to March, exports to third countries actually outweighed goods shipped to the eurozone. A similar, although less dramatic, story emerged from the import data, with imports from countries outside Europe jumping by 3.5 percent over the year and imports from euro area nations rising by 2.3 percent. Despite this trend, a strong Germany is the best way for the eurozone to escape its difficulties, said Christian Schulz from Berenberg Bank in a research note. "Southern European companies do seem successful in tapping German demand to replace some of the loss in their domestic demand," he said. "Thus German growth helps the rest of the eurozone to export their way out of trouble," added the analyst.