For years Germany exported more than it imported. The picture is changing due to massive increases in the price of importing crude oil and gas. According to business associations, the prospects for the export economy are bleak.
The explosion in energy prices left its mark on Germany’s trade balance in May. For the first time in at least 14 years, Germany reported a minus in trade with other countries in one month.
Imports increased by 27.8 percent to 126.7 billion euros compared to the same month last year, as reported by the Federal Statistical Office in Wiesbaden. Exports “Made in Germany” rose by 11.7 percent to 125.8 billion euros. The foreign trade balance closed with a minus of around 1.0 billion euros after calendar and seasonal adjustments. The Association of German Chambers of Industry and Commerce (DIHK) sees the start of the export downturn.
According to the Wiesbaden authority, it was the first trade deficit in a month since January 2008. The figures from before 2008 are not comparable due to a change in statistics. Germany is dependent on energy imports from abroad. Oil and gas prices have skyrocketed since the beginning of the Ukraine war.
For years, Europe’s largest economy exported more than it imported. This repeatedly caused criticism from trading partners. Former US President Donald Trump was particularly bothered by this.
«The export downturn has begun»
Compared to April, exports of goods fell by 0.5 percent in May, while imports rose by 2.7 percent. “The export downturn has begun,” said DIHK foreign trade chief Volker Treier. “Exporters are less and less able to pass on the cost increases caused by supply chains to international customers.” In addition, important import goods often do not arrive for the necessary further processing, especially because of the corona lockdowns in China. An end to price increases and supply chain problems is not in sight.
According to the BGA industry association, the prospects are bleak. At present, exports are mainly being supported by an increase in trade with the USA, said the President of the Federal Association of Wholesale, Foreign Trade and Services (BGA), Dirk Jandura. “The consequences of the Russian war of aggression and the disruptions in the international supply chains will also leave much greater traces in foreign trade.”
The order books of the companies are still full, but the orders are becoming rarer. “And the situation could become even more dramatic if gas supplies from Russia were to be cut off. Therefore, there is no alternative to more free trade,” said Jandura.
Exports to Russia are increasing
Exports to Russia rose by 29.4 percent month-on-month to 1.0 billion euros in May, despite sanctions against the country following the attack on Ukraine and measures to restrict exports. In March and April they had fallen significantly. In a year-on-year comparison, however, exports to the Russian Federation fell by 54.6 percent.
Imports from the country decreased compared to the previous month by 9.8 percent to 3.3 billion euros. Russia mainly supplies raw materials and energy.
Source: Stern
Jane Stock is a technology author, who has written for 24 Hours World. She writes about the latest in technology news and trends, and is always on the lookout for new and innovative ways to improve his audience’s experience.
