Trade between Russia and Germany has fallen significantly
Countries of the former Soviet Union are becoming increasingly unimportant for German business. The volume of export-import operations with major countries of the region, excluding Ukraine, fell significantly. Evidence of this can be found in the data, for the first half of 2016, of the Federal Statistical Office of Germany.
DW reported that this data was exclusively obtained and then distributed to journalists by the German Committee on Eastern European Economic Relations, which is the association of firms operating in the former Soviet Union countries and in Eastern Europe.
According to the official statistics, the deterioration of all key indicators, which include exports, imports and trade turnover, were recorded with regard to business with Russia, Kazakhstan, Azerbaijan and Belarus. With regard to percentages, the biggest fall happened in bilateral trade with Azerbaijan. It was reduced by more than 44% in comparison with the first half of 2015, while the volume of German deliveries to this country fell by 65%, and German purchases from this country fell by 37%.
Exports to Kazakhstan fell by 24%, imports of Kazakhstani goods dropped by 13% and bilateral trade turnover decreased by 16.5%. A press release of the Committee stated that many countries in the region “continue to suffer from the weakness of the Russian economy and the falling of prices of raw materials”.
However, there are apparently other reasons for the 43% decrease of Belarusian exports to Germany.
Germany’s most important business partner in the region has been, and remains, Russia. However, business between the two countries has been declining since 2012. In the first half of 2016, foreign trade turnover again fell by 14% to €22.3 billion. During that time, imports from Russia decreased by 21% to €12.2 billion. This can be explained not so much by a decrease in the physical volumes of imports, as by falling prices of Russia's main export commodities, which are oil and gas.
Exports from Germany to Russia decreased by 3.2% to €10.1 billion, which in the Committee was seen as an encouraging sign of approaching a bottom. According to the results of 2015, German exports to Russia declined by a quarter, which makes a significant slowdown in the rate of decline obvious. The Committee added that in comparison with the first half 2012, the volume of German exports to Russia fell by €8 billion.
At that time, Russia's share in the total volume of German exports exceeded 3%. Now, it is less than 1.7%, which equates to €10.1 billion compared to €603.5 billion, which German exporters have gained in the world market in the first half of 2016.
“To return to the former growth rates, it is necessary to modernize the Russian economy and overcome its dependence on raw materials, as well as political rapprochement and the gradual lifting of the sanctions,” this was said by the Executive Director of the German Committee on Eastern European Economic Relations, Michael Harms. The only major post-Soviet country with positive dynamics in trade with Germany in the first half of 2016 was Ukraine. The volume of German exports to this country increased by 31% and was characterized by the Committee report as “a genuine firework”.