German exports slump sharply

style="float: right; margin-bottom: 10px; font-weight: 600;"Tue 9th Feb, 2021

The Corona crisis tore deep holes in the German export balance last year. Exports of goods slumped by 9.3 percent compared with 2019 to 1204.7 billion euros, according to the Federal Statistical Office in Wiesbaden.

It was the sharpest decline since the global financial crisis in 2009, when exports had fallen by 18.4 percent. The volume of imports fell last year by 7.1 percent to 1025.6 billion euros.

Temporary border closures, logistics disruptions and supply chain disruptions at the start of the Corona pandemic in spring 2020 had significantly slowed down export business. Although foreign trade subsequently worked its way gradually out of the Corona trough, it was not enough to offset the slump.

For this year, the German Association of Foreign Trade (BGA) recently forecast a significant increase. Accordingly, the pre-crisis level should be reached again by summer 2022 at the latest.

Recovery at the end of the year despite the second lockdown
Increased demand from China in particular recently boosted business for German exporters. The world's second-largest economy, which is an important sales market for goods "Made in Germany," had grown last year despite the burdens of the pandemic.

Notwithstanding the second lockdown in many countries, the recovery continued at the end of the year. Exports rose slightly in December compared with the previous month by 0.1 percent to 100.7 billion euros. Compared with the same month a year earlier, they increased by 2.7 percent.

Sentiment among German exporters had even brightened considerably in January. The Ifo export expectations of industry rose from 1.9 points to 6.0 points in January. This was the best value since October. Among other things, a robust industrial economy and the global vaccination launch led to cautious optimism.

While industrial production had slumped in the first Corona wave, work continued at most plants in the second wave. Borders remained open for trade.

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