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German surplus proves mixed blessing for Merkel

2020-02-11    Author:   Source:Chinadaily   Views:427    

A report by the influential Ifo economic institute has revealed that Germany has maintained the world's largest current account surplus for the fourth consecutive year.

The figure of $293 billion is made up of the flow of goods, investments and services through the country over the past year, with Japan next with $194 billion. For many years, Germany has been criticized for not doing more to encourage domestic demand and imports, as a way of evening out global trade.

"Stronger exports to the United States due to the stronger depreciation of the euro and increased exports to the United Kingdom, where demand recovered somewhat, saw total German exports rise sharply again in the second half of the year," said Ifo economist Christian Grimme.

"By contrast, imports expanded very weakly in the summer half of 2019-the ongoing industrial recession in Germany severely curbed imports of intermediate goods."

US President Donald Trump has been a frequent critic of Germany's export strength, fueled by industries such as its strong automobile industry, which is key to the size of the surplus. But despite criticism of her fiscal policy, Chancellor Angela Merkel has so far remained defiant.

"We are proud of our cars and so we should be," she said last year, pointing out that many German cars were built in the United States and exported to China.

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