German Export Growth Outpaces Forecasts Amid Industrial Downturn

German exports saw a significant rise in December, primarily driven by increased shipments to the U.S. and China, surpassing expectations. However, industrial output fell, dampening hopes for economic recovery. Exports to the U.S. and China increased notably, but industrial production declined by 1.9%, challenging optimistic projections.

German exports surged in December, surpassing expectations with a 4.0% increase, driven by heightened demand from the United States and China, official data revealed. This rise eclipsed the predicted 1% climb cited in a Reuters survey, reflecting a positive direction for the country's foreign trade.

Export growth was particularly notable outside of the EU, with shipments to the U.S. and China increasing by 8.9% and 10.7%, respectively. Despite this positive trend, exports to the U.S. declined by 12.9% from the previous year, attributed to a 15% tariff pressure on EU goods, indicating fragility amid global trade policies.

In contrast, Germany's industrial output took an unexpected hit, decreasing by 1.9% instead of the anticipated 0.3%. The slump casts doubt on recovery prospects for Europe's largest economy, as recent gains in industrial orders, although promising, may not translate into sustained output improvement according to analysts.

(With inputs from agencies.)