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Germany notched up its biggest ever trade surplus in 2016, figures which are likely to embolden critics in Washington who claim Europe’s largest country has unduly “exploited” a weak exchange rate.
A climb in exports helped push Germany’s already mega trade surplus to a fresh high of €252.9bn last year from 2015′s €244.3bn – a record in the post-war era, according to figures from Destatis.
Exports rose 1.2 per cent in the year, with the euro dropping around 5 per cent against the dolla over the period but strengthened slightly in trade weighted terms.
Both the German government and senior eurozone officials have been forced to vigorously deny the country has been benefited from a “grossly undervalued” exchange rate after comments by Donald Trump’s top trade adviser that Berlin has exploited a weak currency to boost its export competitiveness.
German exports to eurozone countries were up 1.8 per cent last year with imports inching up 0.7 per cent. But goods and services sold outside the EU fell 0.2 per cent and imports climbed 1.7 per cent.
Earlier this week, the head of Germany’s Bundesbank said claims by Peter Navarro – the new White House trade adviser over Germany currency exploitation – were “more than absurd”.
“German companies are above all competitive because they are excellently positioned in global markets and convince with innovative products”, said Jens Weidmann.
The record surplus comes despite a soft export performance at the end of the year. Germany’s month on month exports dropped 3.3 per cent at the end of the year – a steeper fall than the 1.3 per cent expected by analysts, while import growth was flat in December. It was the worst month for exports since August 2015.
This helped push down Germany’s December trade surplus from €22.7bn to €18.7bn and comes after a surge in exports of nearly 4 per cent in November (see chart below).
Charts via Bloomberg