The German economy was hit by the war in Ukraine and the rise in energy prices, and this is now reflected in a trade deficit for the first time since 1991. A trade deficit was created when total exports from the country were smaller than total imports. Germany has for years been considered one of the most powerful manufacturers in Europe and in the world in general, but recent economic events are beginning to affect it as well.
The deficit was created due to the movement of forceps of declining demand for German products in other countries along with an increase in production costs of imported raw materials, mainly energy, which increased the monetary value of total imports.
In total, German imports grew by 2.7% a month, more than economists expected, while exports fell by 0.5%. This trend led to a gap of 1.04 billion euros between imports and exports, to the detriment of Germany for the first time since the unification of East and West Germany in the early 1990s.
Germany is an energy importer, and is particularly dependent on gas imports. Russia has recently slowed gas exports to Germany due to geopolitical tensions, and there are fears that exports will come to a complete halt, which has boosted gas and energy prices in general. Germany, and the whole of Europe, are looking for other energy sources, including in Israel, and meanwhile energy costs are very burdensome for production and the German economy.
Food prices have also risen recently and more commodity prices. According to Germany’s calculations, the prices of imported products rose by 30% while the prices of exported products rose by only 15%, which also contributed to the creation of the deficit.
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