Germany and Export | Facts and Changes in 2022 ????

Development of foreign trade in Germany

2022 | The German economy is still largely export-oriented. Around every fourth job in Germany depends on exports. At the same time, as a country with few raw materials, Germany is also dependent on imports – especially in the energy sector. Despite this import dependency, goods exports in Germany have been higher than goods imports for decades. In the years 2014 to 2019, record surpluses were even achieved in the trade balance: the value of exported goods was more than 210 billion euros higher than the value of imported goods in all six years. German economy is largely export-oriented. Around every fourth job in Germany depends on exports. At the same time, as a country with few raw materials, Germany is also dependent on imports – especially in the energy sector. Despite this import dependency, goods exports in Germany have been higher than goods imports for decades. In the years 2014 to 2019, record surpluses were even achieved in the trade balance: the value of exported goods was more than 210 billion euros higher than the value of imported goods in all six years.

A few facts and history

According to the Federal Statistical Office, Germany exported goods worth 1,375 billion euros in 2021 and in return imported goods worth 1,203 billion euros - the value of exports and imports has never been higher. Overall, the export of goods and the import of goods increased by 5.1 and 4.8 percent annually between 1980 and 2021.

• In 2020, based on the value of all goods, 32.7 percent of Germany's domestic demand was covered by imports. The foreign trade ratio also shows how important foreign trade is for Germany. The foreign trade ratio corresponds to the percentage of goods exported and imported from a country/region to the respective gross domestic product (GDP). According to the United Nations Conference on Trade and Development (UNCTAD), Germany's foreign trade ratio rose from 43.8 percent in 1990 to 70.5 percent in 2008. The global financial and economic crisis led to a significant drop in the foreign trade ratio to 60, 2 percent in 2009. However, the pre-crisis level was already exceeded in 2011 at 72.9 percent. In 2019, Germany's foreign trade ratio was 70.5 percent, in 2020 it fell to 67.3 percent due to the corona pandemic.

In 2008, Germany was able to just barely defend its title as "World Export Champion" against China - Germany exported more goods than any other country six times in a row. In 2009, however, Germany was clearly replaced by China. According to UNCTAD, China was able to continue to expand its lead over Germany, to a good 1,200 billion US dollars in 2020. In addition, the USA was again ahead of Germany in the years 2010 to 2020 - in 2020 the difference was 51 billion US dollars .

• A completely different ranking emerges when comparing goods exports per capita: From this perspective, the trading hubs of Hong Kong and Singapore were at the top in 2020. The Netherlands, Switzerland, Ireland and Belgium followed. According to this calculation, Germany was in the top 20 of 190 states/territories with more than 100,000 inhabitants (14th place), well ahead of the USA (46th place) and China (75th place). Accordingly, Germany accounted for an above-average 7.8 percent of the goods exported worldwide in 2020 - with a share of 1.1 percent of the world population.

• In every year since 1952, more goods have been exported from Germany than imported. In the eighteen years from 2004 to 2021, the trade balance surplus was more than 150 billion euros seventeen times. And in 2009, too, the trade balance was positive (EUR 139 billion) despite the global financial and economic crisis and Germany's high dependence on exports. According to the Federal Statistical Office, the highest trade surplus to date was achieved in 2016 at 248.9 billion euros. The years 2017 and 2015 accounted for the second and third highest surplus (2017: 248 billion euros / 2015: 244 billion euros). Due to the corona pandemic, the foreign trade balance fell from 224 to 173 billion euros from 2019 to 2021 (minus 22.8 percent).
• The high balance of trade surpluses are a major reason why Germany's current account has been consistently positive since 2002. The current account summarizes various balances – including the trade and services balances. Germany's current account surplus increased between 2003 and 2007 from 31.3 to 171.5 billion euros. Even in the crisis years of 2008 and 2009, high surpluses of 145.0 and 142.7 billion euros, respectively, were achieved. In the years that followed, the current account surplus increased again and reached its all-time high in 2016 at EUR 266.7 billion.
• In six out of seven years since 2015, current account surpluses have been more than 255 billion euros. Only in 2020 was the surplus slightly lower (EUR 239 billion) due to the corona pandemic. In 2021, the current account surplus was 265.3 billion euros. According to the Deutsche Bundesbank, the surplus in the goods trade balance was 192.4 billion euros. The balance of primary income was also positive in 2021 (plus 126.6 billion euros). Contrary to the previous years, in which the service balance was clearly negative, it was slightly positive in 2020 and 2021 (2.7 and 0.3 billion euros respectively). As in previous years, the balance of secondary income was also negative in 2021 (minus EUR 54.1 billion).

All forecasts indicate that Germany will continue to move from the top list of major exporters in the next 5 years. The great crisis and great inflation affect the economy and the EURO as a currency.

The high stability of the German economy has been disturbed and there are great speculations that there will be a certain collapse of the German economic system.