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Germany Holds On to Spot as No. 1 Exporter

BERLIN -- Germany was the world's largest exporter for the second year in a row in 2004 despite the skyrocketing strength of the euro, according to preliminary statistics released by the government Tuesday.

With automakers like DaimlerChrysler and Volkswagen and international corporations like Siemens, Germany's trade surplus widened to a record 155.6 billion euros ($204 billion) in 2004 from 129.9 billion euros in 2003, according to a report from the Federal Statistics Office.

The office estimated exports were up 10 percent on the year to 731 billion euros ($958 billion), while imports were up 7.7 percent to 575.4 billion euros ($754 billion), based on projections from the numbers reported through the end of November 2004.

The United States exported about $740 billion (565 billion euros) worth of goods between January and November, and the statistics office said it was unlikely that any spike in December would have pushed the year-end total above Germany's.

Exports have been driving Germany's economic recovery, which posted gross domestic product growth of 1.7 percent in 2004 -- slow, but more than the previous three years combined.

Still, leaders are worried the spike in the euro currency will put a damper on exports, by making products from Germany and other euro-zone countries more expensive abroad, while making U.S. exports cheaper.

The euro, used in 12 countries, initially fell against the dollar after its 1999 debut and bottomed out at 82 cents in October 2000. But it hit $1.20 in September and then rocketed up to an all-time high of $1.37 at the end of December over market concerns about the ever-growing U.S. trade and budget deficits.

Though it has fallen slightly from the all-time high, analysts still are predicting the currency to be worth at least $1.40 by the end of 2005.

Despite the strong euro, German exports to non-European Union countries, which are affected by the euro's strength, were up 10.4 percent on the previous year, while imports grew 9.8 percent.

Exports to countries within the European Union increased 9.8 percent, while imports were up 6.5 percent. Exports to countries within the European Union that use the euro rose 10.3 percent on the year, while imports were up 8.1 percent.

The final 2004 data, along with December trade numbers, will be released by the Federal Statistics Office next month.

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