US overtakes France as the top market for German exports
Published 23/02/2016 | 02:30
The United States became the top destination for German exports last year, overtaking France for the first time since 1961 thanks to an upturn in the US economy and a weaker euro.
Exports to the US rose by 19pc to €114bn in 2015, compared with an increase in French purchases of 2.5pc to €103bn. It was the first time in more than half a century that France was not Germany's biggest trading partner and economists said the picture was unlikely to change any time soon.
"This is more of a long-term trend," said Simon Juncker, an expert at Germany's DIW economic institute. He said solid US growth rates were partly responsible for the rising demand for German goods.
The world's biggest economy grew by 2.4pc last year and the Organisation for Economic Cooperation and Development (OECD) expects US gross domestic product (GDP) to increase by 2pc this year.
France's GDP, on the other hand, rose 1.1pc in 2015 and the OECD is forecasting growth of 1.2pc this year.
"The American economy is currently experiencing a stable economic upturn, which benefits German companies," said Bernhard Mattes, head of the American Chamber of Commerce in Germany.
"This also includes low energy prices, a comparatively low US wage level and the weak external value of the euro."
Since mid-2014, the euro has depreciated by nearly a fifth against the dollar, following expansionary monetary policies by the European Central Bank.
"This exchange rate effect has boosted foreign demand quite markedly," said DIW's Juncker.
As a member of the euro itself, France wasn't able to benefit from that depreciation in its trade with Germany.
The data comes just days after the OECD said countries should take advantage of record low interest rates to boost public investment, as it warned that global growth was essentially flatlining.
In its latest economic assessment, the Paris-based organisation said the world economy this year will grow no faster than 2015, which it said was the weakest since 2010.
The think-tank said achieving strong growth in the global economy remained "elusive, with only a modest recovery in advanced economies and slower activity in emerging markets".
OECD chief economist Catherine Mann said a stronger collective policy approach is urgently needed, focusing on a greater use of fiscal and pro-growth structural policies. The OECD now expects US and Eurozone growth to slow from the previous year, to 1.4pc for the latter, and to pick up only marginally in 2017 to 2.2pc and 1.7pc respectively.
The global think tank left its forecasts for Chinese growth unchanged for the next two years, but still expects growth to slow to 6.5pc this year and 6.2pc in 2017.
In the Eurozone, the positive effect of lower oil prices on activity has been less than expected, the OECD said, while very low interest rates and a weaker euro had yet to lead to sustained stronger investment.
Across the Atlantic, US growth slowed in the second half of last year under the weight of a stronger dollar which dragged on exports, and the impact of lower oil prices on the country's large oil and gas industry.
Among the largest emerging economies, Brazil was seen as a major victims of falling commodity prices, with a recession expected to be deeper than feared at -4pc this year. (Reuters)