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German trade surplus shrinks to lowest level in two decades

February 2, 2023

Despite an increase in exports, Germany's much-vaunted trade surplus fell for the fifth consecutive year in 2022. Much of the decline was due to higher energy prices after the Russian invasion of Ukraine.

A truck loads containers at the Duisburg harbor
Germany continued to have a trade deficit with China in 2022Image: Maja Hitij/Getty Images

Germany's exports totaled €127.4 billion ($140 billion) in December, a decline of 6.3% compared to the previous month, according to a report released by the federal statistics office Destatis on Thursday. Analysts had predicted a much lower drop of 3.3%.

Imports fell 6.1% in December, far more than forecasts for a drop of 0.8%. Most of Germany's imports came from China, to a value of €13.5 billion in December.

The United States remained the top destination for German exports, though the value of goods sent there dropped by 10% in December compared to the previous month.

Although annual exports increased by 14.3% in 2022 compared to 2021, imports climbed at a much higher rate of 24.3% due to increased energy prices prompted by Russia's invasion of Ukraine. This led to the trade surplus of the EU's biggest economy to shrink for the fifth consecutive year.

Overall in 2022, the country's trade surplus fell to €79.7 billion the lowest level since 2000, Destatis said, and down by more than half from 2021's surplus of €175.3 billion.

The numbers showed that despite soaring inflation beginning to drop in November and December, the cost of living crisis and global supply chain problems continued to weigh on the German economy. However, the country did manage to avert a predicted recession, showing growth of 1.9% in 2022.

es/sms (AFP, Reuters)

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