Corona Stats Germany: Export Growth and Economic Outlook

The German economy is showing signs of recovery, with numerous sectors anticipating export growth. Food producers and beverage manufacturers are particularly optimistic about their prospects, as evidenced by the latest figures from the ifo Institute. The institute's export expectations rose to -1.4 points in March, up from -7.0 points in February, indicating a more positive outlook.

The export industry is becoming increasingly optimistic, with foreign trade contributing significantly to Germany's economic output. In fact, the country has already amassed a surplus of EUR 49 billion in the first two months of the year, representing an increase of over 50% compared to the same period last year and even more than double the surplus from two years ago.

While exports fell by 2.0% in February compared to January and by 4.4% compared to February 2023, imports rose by 3.2% in February compared to the previous month but still lagged significantly behind the previous year's level by 8.7%. The surplus is primarily driven by reduced imports due to lower energy prices.

Despite the crises in 2024, Germany is poised to achieve an all-time high export surplus. Our CEO Outlook 2023/24 survey, which gathered insights from 1,325 CEOs worldwide, including 125 CEOs in Germany, suggests that private consumption will emerge as the most important driving force for the economy in 2024, followed by an increase in foreign business anticipated in 2025.

Researchers expect a gradual recovery starting from the spring, but caution that the overall momentum will be modest. Domestic private consumption and corporate investment remain tepid, with economic output hovering marginally above pre-pandemic levels. There is currently no growth impetus coming from either Germany or abroad.

In light of these developments, leading economic research institutes in Germany have drastically revised their forecast downwards for 2024, anticipating a minimal growth of 0.1%, a significant departure from the 1.3% projection made earlier. As the situation continues to unfold, it is crucial to monitor the key indicators and adjust strategies accordingly to navigate the challenges posed by the ongoing pandemic and other global factors.

(Source: ifo Institute)

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