German exporters will be delighted at the reopening of China’s economy as it will probably boost economic activity in the Asian region, improving the market’s appetite for European goods once again. In 2022, China was Germany’s second-largest export destination outside the Euro Area, after the U.S., making it an important market for the nation’s industrial products.
Germany’s BDI industry association predicts that exports will grow by 2% in 2023, doubling its forecast fromearly January. However, this still falls short of the forecasted 2.5% growth in global exports.Combined with the reopening of China’s economy and the resilient U.S. economy, the export business benefits from well-oiled supply chains.
Month-on-Month exports for February surged by 4% to €136.7B, leading to an export surplus peaking at its highest in two years, primarily driven by robust demand in China and the U.S. An upbeat sentiment among German exporters has further supported export growth expectations. According to the IFO Institute, the barometer for export expectations rose by 0.5 to over 4.0 in March, signaling improved confidence, as the barometer reached its highest since the onset of the Russia-Ukraine conflict.