German continues to experience a fall in exports: Destatis

The first direct export shipment under the Regional Comprehensive Economic Partnership starts at the Damaiyu port, Yuhuan, Taizhou, east China's Zhejiang province, June 6, 2022. (Photo by Duan Junli/People's Daily Online)
export shipment

Germany’s exports declined 1.2 percent month-on-month to 127.9 billion euros (134.3 billion U.S. dollars) in August, according to provisional data published by the Federal Statistical Office (Destatis) on Thursday.

The value of goods imported by Europe’s largest economy fell slightly by 0.4 percent to 111.4 billion euros, resulting in an import surplus of 16.6 billion euros.

The reason for the “persistently poor figures” was the “overall weakening of the global economy,” with important export markets, such as China and the United States, showing less interest in German goods, the Federation of German Wholesale, Foreign Trade and Services (BGA) said in a statement.

Exports to China, Germany’s largest trading partner, rose by 1.2 percent month-on-month to 8.4 billion euros. At the same time, exports to the United States dropped 1.3 percent to 13.3 billion euros, according to Destatis.

“Our companies continue to struggle with rising energy prices, too high inflation and excessive bureaucracy. This creates a mood of uncertainty,” BGA President Dirk Jandura said, calling for a reduction of trade barriers to create a “climate of competitiveness and investment enthusiasm.”

According to a recent study by the German Economic Institute (IW) and Frontier Economics, high energy costs could cause a welfare loss of up to 4.5 percent over the next 15 years without countermeasures from politics.

If Germany continues on its current course, the country will be “pushed further backwards in international competition,” Siegfried Russwurm, president of the Federation of German Industries (BDI), warned last week, demanding greater financial relief for industry.

As a solution, a controversial temporary cap on electricity prices for industry is being discussed in government without much backing from experts. According to a survey published on Thursday by the ifo Institute for Economic Research, 83 percent of economists reject this solution.

“An industrial electricity price would reduce the incentive for companies to make production more energy-efficient,” ifo researcher Niklas Potrafke said. In addition, the government “runs the risk of being locked into paying subsidies.”

Next year, Germany as an exporting country will continue to receive “little impetus” from its trading partners, the Macroeconomic Policy Institute (IMK) said at the end of September, forecasting imports to rise by 1.8 percent but exports to only increase slightly by 0.5 percent in 2024. (1 euro = 1.05 U.S. dollars)

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