Germany Economy: Exports Plunge 24% In April Amid Coronavirus Pandemic

Germany’s exports plunged by 24% in April over the previous month according to the Federal Statistical Office, as Europe’s largest economy grappled with the impact of the coronavirus. In March, exports declined by 11.7%.

Germany shut down restaurants, schools, bars, movie theaters and other public venues in mid-March. On April 20, Germany began reopening its economy, beginning with small shops. In the first three months of the year, German GDP dropped by 2.2%, with that number expected to be higher in the second quarter.

Germany is an export-driven economy, with German manufacturers selling well-made products abroad such as automobiles and household appliances.

“Little is left of the last decade’s export boom,” said Alexander Krueger, an economist at German bank Bankhaus Lampe.

Krueger believes the reopening of borders and loosening of lockdown measures could boost the economy, but added that “the road out of the corona trough is long, rocky and above all uncertain, especially for foreign trade.”

The German economy has shown signs of weakening prior to the coronavirus outbreak. In the fourth quarter of 2019, German growth stayed flat at 0%, with the country’s economy growing by only 0.1% in the third quarter of that year.

The ongoing trade war between the U.S. and China, along with the possibility of a no-deal Brexit, have harmed Germany’s exports in recent years.

In January, the U.S. and China signed a “Phase One” trade deal, with Washington suspending tariff increases on Chinese goods in exchange for Beijing buying $200 billion in U.S. goods over the next two years. The German Kiel Institute for the World Economy (IfW) said this deal would hurt Germany, as China will now be obliged to buy more American goods instead of going for German products. In a February analysis, the IfW says German exports in fields such as vehicles, aircraft and industrial machinery will be hit hard by the agreement.

The U.K. could also leave the European Union without a trade deal, hurting German exports to the country. A February 2019 study from the Leibniz Institute for Economic Research Halle and the Martin Luther University Halle-Wittenberg revealed 100,000 German jobs could be at risk due to a no-deal Brexit.

The coronavirus has impacted economies around the world, with the International Monetary Fund projecting in April that global growth will drop 3% this year.