German exports fell by the largest amount in five months in January, dropping more than forecast and putting a slight damper on the outlook for Europe’s largest economy, though economists said a weak euro and cheap oil would help in the months ahead.
Seasonally-adjusted exports decreased by 2.1 percent on the month after a sharp rise in December, data from the statistics office showed. They missed the Reuters consensus forecast for a 1.5 percent drop and undershot even the lowest estimate for a 2.0 percent decline.
The data for December was revised down to a 2.8 percent gain from a previously reported 3.4 percent increase.
“It’s a breather for the export sector but it’s not so much a sign of upcoming weakness of the economy,” said ING economist Carsten Brzeski, adding that growth of up to 0.4 percent was still likely for January-March given strong retail sales, decent industrial output and robust construction activity.
Household spending was the main growth driver in 2014 alongside resurgent investment though foreign trade, which traditionally propelled the economy, did make a contribution to gross domestic product (GDP) after dragging on it in 2013.
The government expects the economy, which expanded by 1.6 percent last year, to grow by 1.5 percent in 2015 and Economy Minister Sigmar Gabriel has said this will be mainly fueled by consumer spending which is booming thanks to low unemployment, rising wages and weak inflation plus a dramatic oil price drop.
But Stefan Kipar, economist at BayernLB said the prospects for German shipments abroad were bright: “The weak euro should boost exports. The low oil price is also supporting the economy in many of Germany’s trading partners, which should ultimately benefit German exporters too.”