Germany's strong link to the global economy

Despite difficult conditions, SMEs achieved record results in their international activities in 2022. The upturn was spread across many shoulders. Europe remains the most important foreign market but the highest growth was achieved outside of Europe.(June 2024).

The future-proof positioning of Germany's supply of mineral raw materials is key to safeguarding the country’s viability as a business location, also in view of rising minerals demand for use in future technologies. A study commissioned by KfW Research and compiled by IW Consult and Fraunhofer ISI analyses the raw material-related value added for the raw materials copper, lithium and rare earths. (March 2024)

Around 3.8% of small and medium-sized enterprises in Germany plan to invest abroad in the coming years, roughly as many as before the COVID-19 pandemic. Even if a growing offshoring trend is not to be expected, risks to Germany’s competitiveness are emerging that need to be addressed. (December 2023).

German SMEs currently see themselves as being well-positioned in international competition in many respects. The majority of businesses are also optimistic about their future competitive position but they see a clear need for action. (July 2023).

Global value chains play a role in the business cycle comovements between countries, in transmitting and mitigating economic supply and demand shocks, in enabling economies to recover and in generating profits from trade. (April 2023).

The changes in the external economic environment resulting from the coronavirus crisis of 2020 and the impact of the war in Ukraine in 2022 make it necessary to take stock of Germany’s linkages in trade and value chains. (December 2022).

The war in Ukraine is causing new disruptions in global value chains. Also for SMEs, supply bottlenecks remain a burden. Yet, not only supply chain disruptions pose a risk to the further recovery of SMEs' foreign business -– which plummeted during the Corona crisis. (May 2022).

Doubling its economic output by 2035 is China's more ambitious development goal, compared to achieving high-income country status by 2025. If the innovation strategy is successful, international competition in high-value and cutting-edge technology goods is likely to become stronger for Germany as well. (January 2022).

The effects of globalisation on the German economy up to 2030 are analyzed in a study carried out by Prognos using three scenarios. A renewed surge of globalisation represents the best scenario, deglobalisation the worst. In between, the slowed globalisation ranks. (October 2021)

When globalisation slows down, German companies are asked to review their export strategies. A Prognos study identifies adaptation options: a stronger focus on the domestic market, the development of new, innovative export products and the opening up of new export markets in emerging and developing countries. (October 2021)

The coronavirus crisis has sent SMEs’ international business tumbling. In future, SMEs want to focus more strongly on the domestic market or diversify their exports more. But their willingness to give up efficiency in return for more resilient value chains is limited. (May 2021)

International trade continues to play an important role for Germany's economic model. The Corona crisis caused a sharp drop in capital goods trade in particular. In the longer term, digitalisation and the transition to a climate-neutral economy are important topics for international trade. (March 2021)

International trade collapsed during the Corona crisis. The crisis experience is likely to prompt many businesses to review and adapt their global value chains. As a result, globalisation could lose further momentum. (December 2020)

The global response to the coronavirus pandemic has plunged Germany into a deep recession. This discussion paper describes what we now need to do in Germany to succeed in overcoming the crisis and strengthening environmentally sound growth on a sustainable basis. (October 2020)

The global spread of COVID-19 and the response to the pandemic have led to a rapid rise in uncertainty, which has a negative impact on economic activity. Measuring uncertainty, however, is a challenge. (September 2020)

The economic recovery from the coronavirus crisis will hinge on meeting three immediate challenges: managing increased business debt and its consequences, building on the initial impetus for digitalisation and advancing carbon neutrality. (August 2020)

The economic recovery from the coronavirus crisis will hinge on meeting three immediate challenges: managing increased business debt and its consequences, building on the initial impetus for digitalisation and advancing carbon neutrality. (August 2020)

German-Polish economic relations have developed extremely well. Now, however, the coronavirus crisis is calling into question established structures of cooperation, particularly in the border regions. A more intensive dialogue is now required to jointly overcome the current challenges. (July 2020)

The coronavirus crisis has hit the export-oriented German economy in what was already a difficult situation. Tensions in international trade relations and a worsening global economy also affected SMEs, whose international turnover grew by a mere 3.1% in 2018. (April 2020)

Difficult international conditions are putting constant pressure on global trade. This is not just afflicting Europe’s exporters but also causing a noticeable slowdown in economic activity in the euro area. (February 2020)