Foreign trade under pressure: Bundesbank: German exporters fall back on the world market

Whether mechanical engineering, chemistry or electrical: According to the Bundesbank, the German economy has broadly lost competitiveness in the world markets. “The German export market shares have dropped since 2017 and have developed particularly weak in an international comparison since 2021,” warns the central bank in an analysis from its current monthly report. The weakness of the export contributed noticeably to the crisis of the German economy, which in 2025 threatens the third year in a row without growth.

Compared to other countries in the euro area, the USA and China, Germany was falling behind the world market. Germany made up something in 2023, but in 2024 the trend already showed down again. Without the market share loss in export, the German economy would have grown by 2.4 percentage points between 2021 and 2024.

The Bundesbank’s finding is alarming: the German economy depends heavily on foreign trade. Almost every fourth workplace in Germany depends on the export, which shrank in 2024 and is now under great pressure because of the customs dispute with the USA.

Requested with cars

Particularly questionable: the majority of the lost export shares between 2021 and 2023 go back to a deteriorated competition position in important industries, writes the central bank – and names mechanical engineering, the electrical industry, the chemical and metal industry. In addition, there was a globally weak demand for German sales strikers, especially cars.

The weakness of the exporters follows relatively good years for German foreign trade. After the global financial crisis, the German export market shares remained practically stable by 2016, according to the Bundesbank

External shocks meet Germany

The reason for the problems of the past few years were therefore also economic shocks, which particularly stressed the German economy. This included interrupted supply chains in Corona pandemic and the increase in energy prices with the Ukraine War, which hits chemistry, for example.

In order to counteract, the Bundesbank demands reforms. In this way, work incentives should be strengthened and hurdles should decrease in the immigration of skilled workers. In addition, tax incentives for private investments would have to increase, energy costs are decreasing and bureaucracy is disappearing. “Reforms of the social security systems are also indicated to limit costs and taxes.” The federal government’s projects only partially aimed in this direction. Especially with a view to the aging of society and the shortage of skilled workers, there is a need for reform.