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German exports to Russia plummet – report

Sales fell 63% in March due to sanctions, data shows

German exports to Russia fell to around 860 million euros ($905 million) in March “because of the sanctions imposed”, as well as “additional measures to restrict exports and unauthorized behavior of market participants”, The German Federal Statistical Office announced on Wednesday. This is the lowest export level in almost two decades.

Imports from Russia fell 2.4% month-on-month to 3.6 billion euros ($3.8 billion) over the same period. Disrupted trade with Moscow led to a 3.3% drop in overall German exports last month, according to the press release.

“Looking ahead, despite well-filled order books, the short-term outlook for German exports does not look encouraging,” said ING analyst Carsten Brzeski, quoted by Bloomberg.

“The war in Ukraine is very likely to permanently disrupt other supply chains,” he said. “More generally, with a high risk that the war will accelerate the de-globalization trend and high energy and commodity prices for longer, the German export sector faces more headwinds.”

Russia accounted for 2.3% of total German foreign trade and was the fourth most important country for German goods outside the European Union in 2021. The main goods Germany exported to Russia included vehicles, machinery , trailers and chemicals. Russia’s main exports to Germany were crude oil, natural gas, metals and coal.

Last month, S&P Global warned of a possible financial shock in the event of “commercial break” between the two countries. That could hurt German manufacturing, one of the world’s three manufacturing hubs after the United States and China, S&P chief economist Paul Gruenwald told CNBC.

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