Foreign trade - Weak global economy: Slump in exports from Germany
The slump in German exports continued in October. According to the Federal Statistical Office, the value of goods exports fell both compared to the previous month (minus 0.2%) and compared to the same month last year (minus 8.1%). "Geopolitical risks coupled with the unfortunately still weak global economy continued to weigh on demand for products "Made in Germany" in October," explained Volker Treier, Head of Foreign Trade at the German Chamber of Industry and Commerce. In total, goods worth 126.4 billion euros were delivered abroad.
The economic slowdown in the EU is hitting the German export industry particularly hard, said Treier. "The enormous bureaucratic and cost burden in Germany is also weakening the position of German foreign trade in international competition."
According to the foreign trade association BGA, there is a lack of impetus at home and abroad for a necessary strong upturn in business. "The stubborn inflation resulting from the tight monetary policy of the major central banks and the war in Ukraine with all its political and economic consequences are severely dampening factors," said Dirk Jandura, President of the German Wholesale, Foreign Trade and Services Association (BGA).
According to the statisticians, exports to the member states of the European Union (EU) - the most important sales region for goods from Germany - fell by 2.7 percent to 67.9 billion euros in October compared to the previous month. Exports to the USA and China, on the other hand, increased.
"However, more is probably needed for a sustained change in the export trend," said Thomas Gitzel, Chief Economist at Lichtenstein-based VP Bank. This would require a stronger and more widespread increase in foreign orders. "However, this will not be the case as long as the global economy is not on the road to recovery."
Weak global economic growth expected
The International Monetary Fund (IMF) recently forecast global economic growth of 3.0% this year and 3.0% next year. This would be well below the annual average of 3.8% from 2000 until shortly before the pandemic.
Exports are no longer supporting the German economy for the time being. The balance for the first ten months was also negative. The value of exported goods fell by 0.8% to 1304.6 billion euros compared to the same period last year.
There were also clear signs of a slowdown in imports. The value of imported goods fell by 1.2% in October compared to the previous month and by 16.3% within a year to 108.6 billion euros.
Last year, German foreign trade had still achieved a record result, in part due to significant price increases. However, the effects cannot be precisely quantified as the statisticians do not collect price-adjusted data on foreign trade.
Read also:
- Despite the challenges posed by geopolitical risks and the weak global economy, Germany continues to export products to various parts of the world, with Volker Treier of the IHK emphasizing the necessity for demand in these markets.
- The German Chamber of Industry and Commerce (IHK) in Wiesbaden, where Volker Treier works, has highlighted the impact of the weak global economy on exports, noting a continuous decline in the value of goods exported.
- In the context of the weak global economy, Germany's exports to the EU, its primary sales region, decreased by 2.7% in October, while exports to the USA and China showed an increase.
- The German foreign trade association, BGA, is concerned about a lack of impetus for a strong upturn in business due to obstacles both domestically and internationally, including high inflation and geopolitical tensions.
- The slowdown in the EU's economic situation, further exacerbated by the weak global economy, is severely affecting Germany's export industry. This, combined with the high bureaucratic and cost burdens, weakens the country's position in international foreign trade.
- According to voluminous data presented by statisticians, German exports to foreign markets have been slumping, both in monthly and yearly comparisons, contributing to an overall negative balance in foreign trade for Germany.
Source: www.stern.de
