Although Germany is currently in a state of shallow recession, having recorded negative economic growth for two consecutive quarters, the economic signals from across the Rhine tend to encourage optimism. The German statistics office Destatis has just published trade balance data for this largest European economy. And it appears that the German economy is waking up from its long lethargy.
Indeed, Germany is steadily increasing its trade surplus, which amounted to 18.4 billion euros in April, compared to 14.9 billion in March. German exports grew by 1.2%
This is good news for the European economy as a whole, as Germany is its driving force. The figures published by Destatis also show that the German economy is slowly becoming less dependent on Chinese suppliers and is importing more products from Central and Eastern Europe, especially Hungary, the Czech Republic, Poland, and Romania. This is further good news for Europe, as the Chinese market has become economically unpredictable in recent years – as a result of the pandemic and then the war in Ukraine. In a year-on-year comparison, German imports from China fell by as much as 28.5 percent and from Russia by more than 90 percent
Using Germany as an example, it is clear to see how economic priorities and trade directions are changing in Europe. The increase in German exports owes most to the recovery of the automotive sector, as German car exports rose by as much as 21.1% in April compared to last year’s figures. Greater exports, in turn, are resulting in greater activity from foreign sub-suppliers, e.g. Polish companies supplying car manufacturers with batteries for electric cars.