German Business

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GLOBAL TRADE

German trade with EU countries dropped but increased with the United Kingdom

November 2023: In September 2023, German exports were down 2.4% and imports dropped 1.7% compared with August 2023. Based on provisional data, the Federal Statistical Office (Destatis) also reports that exports decreased by 7.5% from September 2022 and imports fell by 16.6%.

Exports

126.5 billion euros in September 2023

-2.4% compared to previous month

-7.5% compared to September 2022

Imports

110.0 billion euros in September 2023

-1.47 compared to previous month

+16.6% compared to September 2022

Foreign trade balance

+16.5 billion euros in September 2023

-6.8% compared to previous month

Trade with EU countries*

Germany exported goods to the value of 69.8 billion euros to the member states of the European Union (EU) in September 2023, while it imported goods to the value of 58.7 billion euros from these countries in the same period. Compared with August 2023, exports to EU countries dropped by 2.1% and imports from these countries fell by 2.6%.

The value of the goods exported to euro area countries in September 2023 totalled 48.8 billion euros (-2.4%), and the value of the goods imported from these countries was 38.9 billion euros (-3.8%). In September 2023, goods to the value of 20.9 billion euros (-1.3%) were exported to EU countries not belonging to the euro area, while the value of the goods imported from these countries was 19.8 billion euros (-0.2%), on a calendar and seasonally adjusted basis.

Trade with non-EU countries*

Exports of goods to countries outside the EU (third countries) amounted to 56.7 billion euros in September 2023, while imports from these countries totalled 51.3 billion euros. Compared with August 2023, exports to third countries declined by 2.8% and imports from third countries fell by 0.6%.

Most German exports in September 2023 went to the United States. Exports of goods to the US were down 4.0% compared with August 2023, with the value of exports to the United States dropping to 12.8 billion euros. Exports to the People's Republic of China decreased by 7.3% to 7.7 billion euros and exports to the United Kingdom rose by 2.3% to 6.3 billion euros.

Most imports in September 2023 came from the People's Republic of China. Goods to the value of 13.0 billion euros were imported from there, which represented a 0.9% decrease compared with the previous month, after calendar and seasonal adjustment. Imports from the United States rose by 0.5% to 7.7 billion euros. Imports from the United Kingdom increased by 5.2% to 3.2 billion euros during the same period.

Exports to the Russian Federation declined 11.2% to 0.6 billion euros in September 2023 compared with August 2023. Compared with September 2022, when exports to Russia had decreased sharply as a result of the Russian attack on Ukraine, exports fell by 41.7%. Imports from Russia rose by 7.5% to 0.2 billion euros in September 2023 from August 2023, and were down 89.4% compared with September 2022.

* All figures calendar and seasonal adjusted. Data supplied by German Statistical Office (Statistisches Bundesamt)

ECONOMIC FORECAST

German economy to shrink in 2023 before returning to growth next year

28 September 2023: In the spring of this year, economic experts expected a slight improvement in the German economy. But it now looks as if nothing will come of it. The country’s five leading economic research institutes have significantly lowered their economic forecast. Instead of an increase in German economic output of 0.3 per cent, they now predict a fall of 0.6 per cent. Things are not expected to improve until next year.

Economic experts cite weak private consumption as the main reason for the worsened outlook. Demand from abroad is also rather subdued at the moment.

“The sharp rise in energy prices in 2022 stifled any recovery from the Covid pandemic, inflation is draining households' purchasing power and the latest interest rate hikes are weighing on the construction industry,” the forecasters explained. Meanwhile, political uncertainty is having a negative effect on business sentiment.

For the coming year, however, the institutes expect growth to return. "Recently, wages have increased due to inflation, energy prices have decreased and exporters were able to partially pass on the higher costs, so business and private purchasing power is returning. Accordingly, the downturn should ease off by the end of the year.” Next year, economic growth of 1.3 per cent is possible. In 2025, growth should reach a plus of 1.5 per cent.

"The economic weakness has now also affected the labour market," the institutes write. However, in view of the "notorious and prospectively worsening shortage of personnel in many sectors", they expect only a "moderate increase" to 2.6 million unemployed in the current year. That would be about 174,000 more than in 2022. "In the coming year, the number of unemployed will probably fall slightly," according to the forecast. In 2025, it is then expected to fall further to less than 2.5 million.

The Joint Economic Forecast is prepared for the German Economics Ministry by the RWI in Essen, the Ifo Institute in Munich, the IfW in Kiel, the IWH in Halle and the DIW in Berlin.

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