Results of 2022: German Economy on the Verge of Deindustrialistion?

Abstract

In 2022, the German economy was affected by three crises, pandemic, energy and geopolitical. The last two increased significantly in the spring due to the sharp conflict over Ukraine. The result was a further increase in world energy prices, the persistence of transport and logistics problems, gaps in value chains, and a shortage of important components. This led to the deepening of existing and the emergence of new problems in the sectors of the German manufacturing industry – the basis of Germany’s merchandise exports and imports, which traditionally determine the main quantitative parameters of its GDP. Despite the active intervention of the state in economic and political processes and the provision of large-scale financial assistance to economic entities and households, many of them, due to sharply increased prices, especially for gas and electricity, found themselves in a difficult situation. First of all, companies in energy-intensive industries were at risk of stopping production and possible bankruptcy. The uncertainty of the further development of the situation in the economy prompted the leadership of some of the players, incl. leaders, to raise the question of the need to search for new places of production and transfer a number of their enterprises to them. The United States remained one of the most attractive economic and political spaces (economic standards), whose leadership in the second half of 2022 adopted two major business support programs that further increased the attractiveness of American markets for German and European firms. Under these conditions, politicians, experts and entrepreneurs of Germany started talking about the risks of deindustrialisation of the domestic economy and a further decrease in the competitiveness of the German standard. In this context, the author analyzes the economic results of the year of the leader of the European Union, assesses the mentioned risks and gives a forecast for 2023.

Keywords

• germany
• european union
• eu
• standard
• crisis
• pandemic
• energy
• geopolitics
• export
• import
• sanctions
• deindustrialisation