Germany Trade Balance

Germany's exports and imports of tangible goods are summarized in the trade balance sheet. The Federal Statistical Office in Wiesbaden records exports and imports within the EU separately from those with non-EU countries and then consolidates them. If Germany exports more, the trade balance shows a surplus, otherwise a trade deficit. The trade balance, which comprises the services balance, the factor income account and the current transfers balance, is recorded in the current account, which in turn is part of the balance of payments.

If exports exceed imports, measured in monetary terms, within a given period (usually one year), this is a positive sign of the country's competitiveness. Then one also says active or positive trade balance. If a country's currency is devalued, imported products become more expensive, imports fall, while exported goods become cheaper abroad, exports rise. As a rule, however, this effect is delayed.

Germany's economy is strongly export-oriented, but at the same time heavily dependent on foreign raw materials. With a share of almost 20%, the motor vehicle sector is the most important export product. This is followed by machinery and chemicals. The three together cover almost half of Germany's exports.

Since a too high export surplus could endanger the stability of a member compared to other EU states, a limit was agreed with 6% of the gross domestic product or 3%, if the national budget shows a deficit. If this limit is exceeded, an examination can be initiated, which could lead to criminal proceedings, which has not yet been the case. Since the 1990s, the Federal Republic of Germany has continuously recorded an export surplus.

Since about two thirds of the German trade surplus is generated within the EU and only one third with other countries, the influence on the euro is rather small. Moreover, the effect of a change in the trade balance is not clear and depends on other factors. On the other hand, a rising trade surplus points to a successful economy, which could have an impact on exchange rates.