When the Federal Statistical Office presents figures on economic development, it may sound dry in quiet times. But since inflation has penetrated every pocket and the recession seems imminent, every new number serves as an alarm signal. So also on Monday. For the first time in 14 years, the Federal Republic has a trade deficit – more goods were imported than exported. The figures before 2008 are not comparable due to a change in the statistics.
Compared to the same month last year, imports increased by 27.8 percent to 126.7 billion euros, exports rose by 11.7 percent to 125.8 billion euros. This trend reversal can be dangerous for prosperity in Germany. The export surplus has been an integral part of the German growth model in recent years. Viewed with skepticism abroad, but the key to prosperity at home. That seems to be over now.
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“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 imported 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 have a much greater impact on 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. There is therefore no alternative to more free trade,” said Jandura. This is one of the reasons why the federal government decided in recent weeks to ratify the CETA free trade agreement between the EU and Canada, which has long been controversial, especially among the Greens.
The largest export volume currently goes to the USA – goods worth 13.4 billion euros. Exports to China increased by 0.5 percent to 8.7 billion euros. In return, Germany imports goods worth 18 billion euros from the People’s Republic, and only goods worth 7.4 billion euros come from the USA.
The figures on foreign trade with Russia seem surprising. Despite President Vladimir Putin’s war of aggression and the sanctions imposed on the country, exports to Russia rose by 29.4 percent month-on-month to EUR 1 billion in May. In March and April they had fallen significantly. Before the war began, German exports to Russia were mostly well over two billion euros per month.
Imports from the country fell by 9.8 percent to 3.3 billion euros compared to the previous month. The numbers were still high compared to the May imports of previous years. Above all, Russia supplies raw materials and energy – and due to the increased prices, Germany is paying significantly more than before to the warring state.
Another figure published by the Federal Statistical Office on Monday shows that there is still no end in sight to the price increases: 36.3 percent. Producer prices for industrial products in the euro zone rose by this rate in May compared with the same month last year. This is no longer a record after the high of 37.2 percent in April; however, the level remains worryingly high.
Energy alone has now risen by 94.4 percent, after prices had shot up by as much as 99 percent in April. Excluding the energy sector, producer prices rose by a total of 16 percent. The intermediate goods that are important for production increased in price by 25 percent. Producer prices are regarded as a leading indicator for the development of inflation. They are measured before the products are further processed or placed on the market and can indicate the development of consumer prices.