German exports fell four times more than economists forecast in December as the sovereign debt crisis damped growth across the euro region.
Exports slumped 4.3 per cent from November, when they rose 2.6 per cent, the Federal Statistics Office in Wiesbaden said on Wednesday. Economists predicted a decline of one per cent, according to the median of 17 estimates in a Bloomberg News survey. French business confidence held near its lowest level in more than two years in January on recession concerns, the Bank of France said in another report.
While the German economy, Europe’s largest, probably shrank 0.25 per cent in the final three months of 2011, data this year suggest it may avoid recession, which is commonly defined as two consecutive quarterly contractions. Business sentiment jumped to a five-month high in January and factory orders gained 1.7 per cent in December, driven by demand from outside the 17-nation euro area.
“The global economy seems to be gaining traction and some of the uncertainty related to the region’s debt crisis has declined,” said Ulrike Rondorf, an economist at Commerzbank AG in Frankfurt. “But exports to the euro area will remain weak and are clearly a risk.”
The euro rose slightly to $1.3285 at 10.53 am in Frankfurt. European stocks advanced, with the Stoxx Europe 600 Index snapping two days of losses. US index futures and Asian shares also climbed.
The International Monetary Fund warned on Tuesday that China’s economic expansion would be cut almost in half if Europe’s debt crisis worsened. The Washington-based lender currently forecasts Chinese growth of 8.2 per cent this year. China accounted for six per cent of German exports in 2010.