Germany's 3D export strategy to bring an additional EUR36bn in 2015

3/18/2015 - Report
ic_blogtagTradeGermanyExportsInvestment
In 2015 German goods exports are expected to rise by EUR36bn over 2015. Europe, China and the UK are the top 3 destinations: 20.3bn, 4.2bn and 3.7bn respectively.

Stronger demand for high value added goods and a lower euro (only explaining EUR5bn) will boost machinery (+9.3bn), chemicals (+7.8bn) and vehicles (+7.4bn).

The German success story is based on: (i) Diversification of export destinations; (ii) Dependability on exports in the premium segment based upon strong R&D investment; and (iii) Dissemination with an increasingly internationalized supply chain and greater FDIs.

Key risks stem from exposure to economic and political turmoil in export destinations, particularly the Russian balance of payment crisis costs EUR7-8bn in German exports. Competitiveness risk arises from 5pps faster manufacturing wage growth than the US and Japan, but the EUR depreciation should offset on third of the 2015 wage growth (3.3%).

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Germany's 3D export strategy to bring an additional EUR36bn in 2015 - Report