Market Analysis

German exports forecasted to stagnate this year - DIHK

Amos Simanungkalit · 07 May1K Views

The German Chamber of Commerce and Industry (DIHK) reported that German exports are projected to remain stagnant this year, following a 1.8% decrease last year. Despite indications of a modest global economic upturn, businesses are not reaping substantial benefits due to political uncertainties and geopolitical risks, as outlined in the Chamber's AHK World Business Outlook.

Volker Treier, DIHK's foreign trade chief, noted that the sluggish growth in German foreign trade coupled with slight improvements in business expectations and investment intentions foreshadow a challenging year ahead, despite glimpses of optimism. Given Germany's high dependence on trade, international events dampening foreign demand significantly impact its economy.

While German companies operating abroad show growing optimism towards global economic trends, particularly due to lower inflation rates and the prospect of interest rate reductions, expectations for China have diminished. The survey of 4,300 companies revealed that 31% anticipate an economic upturn at their overseas locations this year, compared to 22% in the previous survey. Conversely, concerns about the Chinese market persist, with 80% of companies viewing weak demand there as a significant business risk.

Maximilian Butek, chief representative at the DIHK delegation in Shanghai, highlighted the competitive disadvantages faced by German companies in China, particularly concerning market access and interactions with authorities. Despite challenges in China, optimism remains for business opportunities in other parts of the Asia-Pacific region, which remains vital for diversifying supply chains.

Regarding the eurozone, companies have not witnessed any improvements since November, with business expectations for the next twelve months remaining below the global average. In the United States, concerns center around uncertain economic policies and potential trade barriers that could emerge later in the year.