According to the Federal Ministry of Economics, the Chinese government’s zero-Covid strategy still poses risks for the German economy despite the easing.

“Although there have recently been far-reaching easing in Shanghai,” says the monthly report published on Monday. “But if there are lockdowns of this magnitude again in China, worsening supply bottlenecks and a further slowdown in world trade cannot be ruled out.”

That should also be felt here in Germany, after all, China is by far Germany’s most important trading partner. “Despite the easing in Shanghai at the end of May, there could still be bottlenecks in Germany with a delay,” the ministry warned.

The Russian war against Ukraine remains a risk for the economy. “The German economy has stabilized for the time being after the war shock,” the ministry wrote.

“Nevertheless, insecurity has remained high since the beginning of the war.” This was particularly evident in the decline in incoming orders from industry. But retail sales have also fallen significantly recently.