Export dependency: Risks for the German economy are increasing

Export dependency: Risks for the German economy are increasing

The German export industry is facing challenges because the Prognos Institute predicts a permanent weakening of globalization. A revitalization of multilateral global cooperation in the area of ​​economic policy is considered unlikely. The experts therefore recommend that companies adapt their strategies.

Currently, around a third of German value creation is exported. The authors of the study point to the growing dependence on China, particularly for products such as laptops. For example, the decline in exports to Russia since the attack on Ukraine in 2022 led to a massive 70 percent drop in Bavarian exports.

A complete decoupling of the German economy from China and other potentially unsafe locations could lead to significant losses in sales and procurement markets. The Prognos Institute therefore recommends that companies diversify their supply chains in order to better calculate risks. This would enable electric motors, for example, to be increasingly purchased in North America.

The recommendation for increased diversification of supply chains is intended to help reduce dependence on individual markets and offer companies more stability. This step could enable German companies to react more flexibly to global trade barriers.