BERLIN: Germany saw a surprise boost in industrial production and a widening of its trade surplus in February amid rising tensions with the Trump White House over its export strength.
Europe’s largest economy reported a leap in production of 2.2 percent from the previous month, according to the price-, seasonal- and calendar-adjusted figures from federal statistics authority, Destatis.Analysts polled by financial services firm Factset expected a rise of only 0.3 percent.
Meanwhile, the trade surplus in February reached 21 billion euros ($22 billion), Destatis said, citing preliminary data adjusted for seasonal and calendar effects. Exports increased 0.8 percent over January’s figure to 104.9 billion euros, while imports fell 1.6 percent to hit 83.8 billion.
In January, Germany had exported 18.5 billion euros more than it imported. Carsten Brzeski, chief economist at ING bank, called the increase in industrial production “whopping”, thanks to a surge in construction. “German industry finally returns as a growth engine. No, it’s not a spelling mistake,” he said.
“Today’s data suggest that industrial production could finally return as a growth engine for the German economy.”
However, he said the latest data would “do little to undermine the permanent international criticism of Germany’s trade surplus”.
“The Brexit negotiations and a possible further weakening of the pound sterling, protectionist measures from the Trump administration and negative growth surprises from China pose a clear risk to the German economy,” he added.
US President Donald Trump has vowed to root out “unfair” trade practices around the world and target countries that contribute to America’s substantial trade deficit such as Germany.However, the US trade deficit with Germany fell to the lowest level in more than four years in February at $3.9 billion, the Commerce Department reported this week.
Germany’s panel of economic experts last month rejected criticism that the country was running an overly high trade surplus, but said Berlin could reduce the gap by attracting more investors.
