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GREECE

Germany hits export surplus record in 2014

Economics think tank Ifo said on Monday that their projections show Germany's exports exceeding imports by €220 billion in 2014, pushing the country to a new world record.

The current account surplus was a new record for Europe's biggest economy and was the biggest surplus globally.

Second was China with €150 billion followed by Saudi Arabia with €100 billion, Ifo said.

In 2013, Germany exported €190 billion more in goods than were imported.

Economists said that the increase is due to cheaper oil imports at the end of 2014 thanks to falling prices.

The weakening euro also contributed as it makes German-manufactured goods cheaper in key markets such as the United States and the United Kingdom.

"The largest segment of the annual surplus came from €170 billion in goods exported to the eurozone," read the press statement by Ifo.

That's equivalent to 7.5 percent of Germany's GDP, putting it in violation of the European Commission's recommended threshold of six percent.

The numbers could also fuel fire to the arguments that Germany isn't doing enough to reduce global imbalances. 

The Ifo predicts another record year for German exports in 2015 as oil prices continue to stay low and the euro remains weak thanks to uncertainty over the newly-elected Syrzia government's economic plans for Greece and the success of the European Central Bank's quantative easing plan

SEE ALSO: Lower energy costs tank inflation rate

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MONEY

German shops hit by supply problems ahead of festive season

Germany's business climate worsened in October for the fourth month in a row as supply chain woes weighed on the country's export-driven economy, according to survey data published Monday.

A man walks through the MediaMarkt carpark
A man walks through the carpark of MediaMarkt in Eschweiler, North Rhine-Westphalia. Photo: picture alliance/dpa | Henning Kaiser

The Ifo institute’s closely watched indicator fell to 97.7 points in October from 98.9 points in September, its lowest standing since April, as businesses in Germany were hit by supply chain fears. 

“Supply problems are giving businesses headaches,” Ifo president Clemens Fuest said in a statement, describing the bottlenecks as “sand in the wheels of the German economy”.

The upheaval caused by the pandemic has given rise to global shortages in everything from timber to semiconductors and plastics.

Germany’s key automotive sector has been hit hard by a lack of computer chips, a key component in both conventional and electric vehicles, forcing several German carmakers to pause production.

The news comes after German shops aired concerns that popular Christmas gifts could be short supply when the festive season rolls around.

A recent survey of retailers conducted by the Ifo Institute revealed that 100 percent of bicycle shops were facing supply issues, while the vast majority of furniture, electronics and DIY stores were also struggling to replenish stocks.

In particular, the shortage of chips is expected to have a knock-on effect on the availability of laptops and smartphones. Economics experts believe the issues with electronics and cars could continue until at least 2023. 

READ ALSO: Why everything is suddenly getting so expensive in Germany

Only in construction did the business climate improve, according to the Ifo survey, while sentiment in manufacturing, services and trade deteriorated.

Growth could be “much weaker” in the coming months, according to Fritzi Koehler-Geib, chief economist at German public lender KfW.

“Material bottlenecks and disruptions in the global transport system have been a burden for longer than originally expected and will probably only ease in the coming year,” Koehler-Geib said.

Earlier this month, German economic institutes, including Ifo, revised down their forecast for growth in 2021 due to global supply chain disruptions to 2.4 percent from their earlier prediction of 3.7 percent made in April.

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