Seasonally and calendar adjusted exports of Germany decreased to approximately 130.4 billion Euros in July due to the recession in the global economy.
Germany’s exports decreased by 0.9 percent month-on-month in July due to the recession in the global economy.
Germany’s Federal Statistical Office (Destatis) announced the foreign trade data of Germany for the month of July. Accordingly, seasonal and calendar adjusted exports in the country decreased by 0.9 percent in July compared to the previous month, despite the expectation of a 1.5 percent decrease, to 130.4 billion Euros.
In July, imports increased by 1.4 percent to 114.5 billion Euros.
Thus, Germany’s foreign trade surplus, adjusted for seasonal and calendar effects, became 15.9 billion Euros. In July 2022, the said surplus was recorded as 4.2 billion Euros.
Compared to July 2022, exports decreased by 1 percent and imports by 10.2 percent.
71.9 billion Euros of Germany’s exports in July were made to European Union (EU) countries. 61.7 billion Euros of the country’s imports came from the EU.
Compared to June, exports to EU countries increased by 0.5 percent and imports from these countries increased by 2.9 percent.
According to Destatis data, Germany’s exports to China, its most important trading partner, increased by 1.2 percent compared to June and amounted to 8.3 billion Euros. In the said period, Germany’s other important trade partner, the USA, increased by 5.2 percent to 13.5 billion Euros.
Germany’s exports to Russia increased by 2.2 percent in July, reaching 700 million Euros. Imports from Russia, on the other hand, decreased by 15.7 percent to 200 million Euros.
CHINA IS CHALLENGING THE GERMAN ECONOMY
According to analysts, given the weakening exports, the risk of Germany, which has the largest economy in Europe, to enter recession again in the second half of the year is increasing.
Carsten Brzeski, Head of Global Macro Research at ING and Chief Economist of Germany, said: “Trade is no longer the strong and resilient growth driver of the German economy as it used to be, but rather an obstacle.” used the phrase.
Noting that frictions in supply chains and a more fragmented global economy are affecting this situation, Brzeski said, “Add that China is increasingly able to produce more of the goods it previously bought from Germany.” made its essment.
While the German economy shrank by 0.4 percent in the last quarter of last year and by 0.1 percent in the first quarter of the year, it failed to grow in the second quarter of the year.
While many crises such as the Covid-19 outbreak, supply chain interruptions and the Russia-Ukraine war in recent years have brought to the surface the weaknesses of the German economy, the fact that many countries, especially China, can produce more and more of the goods imported from Germany and interest rates increase with high inflation. It makes it harder for the German economy to grow.
The slowing global growth, the decline in industrial production and the efforts of consumers to cope with rising inflation also negatively affect the German economy.
ENGINEERS’ ORDERS ARE DROPPING
Meanwhile, German mechanical engineering companies, strong in exports, continue to struggle with weakening orders from their customers.
The German Engineers ociation (VDMA) reported that orders from abroad fell 11 percent in July compared to the same month of the previous year.
VDMA Chief Economist Ralph Wiechers said, “Companies are still seeing an increase in their sales. However, due to the lack of sufficient new orders, the order backlog, hence the remaining buffers for production and sales, is gradually decreasing.” used the phrase. (AA)
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