Germany registers first trade deficit since 1991 on surging energy prices

Surging European energy prices caused by Russia’s invasion of Ukraine has left Germany with its first trade deficit in over three decades, official figures released today revealed.

German imports outstripped exports for the first time since 1991, generating a €1bn (£862m) trade deficit in May, according to the country’s statistics agency.

Exports dropped 0.5 per cent, while imports climbed 2.7 per cent to over €125bn (£108bn).

Oil and gas prices on the continent have jumped as a result of Russia choking flows in response to western sanctions. 

Those higher prices have widened the difference between what Germany receives for its exports and what it pays for its imports.

Activity in Germany’s manufacturing sector has been cooled by firms struggling to secure resources due to global supply chain pressures. 

The country’s factories are also heavily reliant on Russia energy to generate output, meaning weaker oil and gas flows have hampered production, weighing on German exports.

Economists have warned the eurozone economy will tip into recession if Russia cuts off all energy energy flows.

Germany’s current account is typically in surplus, partially due to its manufacturing sector dominating the international car market. Automakers globally have been hamstrung by a shortage of semiconductor chips.