BBK: Germany’s Trade Competitiveness At Eight-Year High

FRANKFURT (MNI) – The euro’s rise in recent months has left only a
small dent in the international price-competitiveness of the German
economy, which has rebounded to an eight-year high since the end of last
year, according to the Bundesbank.

“As a result of moderate domestic price and cost trends in the past
years, the price competitiveness of the German economy can still be
assessed as favorable,” the German central bank said in its Monthly
Report released Thursday.

Indeed, the economy’s trade-weighted price edge has soared in past
months toward record levels seen at the start of the decade. The 1.5%
trade-weighted appreciation of the euro since late June has had only
marginal impact on the trend.

Moreover, updated weightings taking account of the growing role of
eastern Europe and the Far East in German trade accentuate the
competitiveness gains, since prices and costs in these regions have
tended to rise faster than the more traditional trade partners, the
Bundesbank noted.

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