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HomeBusinessGermany Posts First Monthly Trade Deficit in 30 Years

Germany Posts First Monthly Trade Deficit in 30 Years


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BERLIN — For the first time in more than three decades, Germany has posted a monthly trade deficit, the most recent sign that Europe’s largest economy is facing stress because of interrupted supply chains and record energy prices linked to Russia’s war in Ukraine.

Exports have been the economic engine in Germany for years, but the steep rise in the price of energy, driven by Russia’s moves to restrict the amount of natural gas it is delivering to Europe, has driven up the price of products made in Germany.

Exports in May fell 0.5 percent from April, while imports rose 2.7 percent, leaving a gap of 1 billion euros, or roughly $1 billion, according to figures released by Federal Statistics Office on Monday. It was the first time that imports had exceeded exports since 1991, the year after the reunification of the formerly socialist East Germany with the capitalist West Germany.

The sudden reversal could signal weakness in parts of the German economy, where one in four jobs relies on exports. The reliance on imported energy — before the start of the war, Russia supplied more than half the country’s natural gas — has added to the cost pressures on German firms.

“The export downturn has begun,” said Volker Treier, the head of foreign trade at the Association of German Chambers of Commerce and Industry. He pointed to the rising cost of German goods shipped overseas. “Exporters are less and less able to pass on cost increases caused by supply chains to international customers,” he said.

The United States remained the most important destination for German goods in May, with sales rising more than 5 percent from the previous month, to €13.4 billion. On the import side, China remained the country selling the most goods to Germany, worth €18 billion in May, a 1.6 percent drop from April.

The decrease in German goods sold in Russia has been among the causes of the drop in exports. For years Russia was a strong market for German manufacturers, but since the invasion of Ukraine in February the trend has been downward as companies have stopped doing business in the country. Compared with a year ago, sales to Russia have slumped more than 50 percent.

Economists are warning that the overall economic situation could become even more serious if Russia decided to cut off its deliveries of gas entirely. That risk has grown recently.

In June, Gazprom, the Russian energy giant, reduced the amount of gas delivered to Germany via Nord Stream 1, a critical pipeline, by 60 percent. This month, the pipeline will shut down completely for scheduled maintenance for about two weeks, raising fears in Germany that the company might leave the taps turned off once the work is complete.

The German government has enacted emergency plans in case of an eventual shutdown of all gas supplies.


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