German exports continue to fall amid economic slowdown
2023.02.02 08:31
German exports continue to fall amid economic slowdown
By Tiffany Smith
Budrigannews.com – Despite diminishing supply chain issues, German exports fell more than anticipated in December amid high inflation and market uncertainty, indicating a slowdown in Europe’s largest economy.
According to data released on Thursday by the federal statistics office, exports decreased by 6.3% in comparison to the month before. This decrease was nearly double what analysts had anticipated, according to a Reuters poll.
In contrast to predictions of a decrease of just 0.8%, imports fell 6.1%.
According to Claus Vistesen, chief euro zone economist at Pantheon Macroeconomics, “these data add to the evidence that overall economic activity in Germany is now slowing.”
According to Vistesen, a significant decrease in trade volumes typically indicates broader economic weakness in Germany.
According to Melanie Vogelbach, managing director of international economic policy at the German Chamber of Commerce and Industry (DIHK), on Thursday, “the massive decline in exports is symptomatic of a challenging year for German foreign trade.”
She stated that exporting businesses were being harmed by issues with the supply chain, significant price increases, and geopolitical dangers.
After making adjustments for the calendar and the seasons, total exports in 2022 increased by 14.3% over the previous year. The war in Ukraine caused an increase in energy costs, which led to a 24.3% increase in imports.
Consequently, Germany’s export surplus decreased in 2022 for the fifth year in a row. In calendar and seasonally adjusted terms, the foreign trade balance decreased to a surplus of 10.0 billion euros in December from 10.9 billion euros in November.
In 2022, Russia’s imports increased by 6.5 percent, reaching a total of 35.3 billion euros. Oil and gas prices primarily drove an increase in imports.
When compared to the previous year, 2022, exports to Russia decreased by 43.7% due to sanctions targeting Moscow for the war in Ukraine.
In December 2022, the majority of German exports went to the United States, with goods exports down 10.0% from November 2022 following seasonal and calendar adjustments. This demonstrates Germany’s dependence on the United States as a trading partner.
Next week, German Economy Minister Robert Habeck and French Finance Minister Bruno Le Maire will travel to Washington to voice concerns regarding climate subsidies in the United States.
One focus of the Franco-German trip is to try to get Europe treated like Mexico and Canada under the U.S. Inflation Reduction Act so that European businesses can take advantage of new tax credits for electric vehicles.
A more in-depth report with additional economic data is released by the statistics office.
