Germany’s declining competitiveness makes exporters lose ground — Bundesbank

According to the Bundesbank’s report, German exporters have lost much of their global market share since 2021, primarily due to the country's declining competitiveness.

A key driver behind the sharp drop in German exports between 2021 and 2023 was worsening supply-side conditions. The slump affected a wide range of economic sectors, with the heaviest losses in mechanical engineering, electrical equipment and energy-intensive industries, particularly chemicals, as noted by the Bundesbank.

Rising energy costs and supply chain disruptions created additional challenges for exporters. Against this backdrop, the country's central bank has called for urgent reforms to improve Germany's business climate. Key proposals include boosting incentives to work, reducing barriers for skilled migrants, cutting red tape, and enhancing tax breaks for private investment.

The German government has already rolled out a package of measures to increase the country’s competitiveness. However, analysts warn that more radical initiatives will be needed for the nation to reclaim its position as a global leader.