# German exporters pinched by 70-billion-euro price squeeze – DIHK
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2022-08-25
Category: NEWS
Category URL: https://financedigest.com/category/news
Meta Title: German Exporters Face Extreme Price Squeeze: DIHK
Meta Description: Find out how German exporters are struggling with soaring prices, affecting their trade and future prospects. Learn more from DIHK insights.
URL: https://financedigest.com/33391german-exporters-pinched-by-70-billion-euro-price-squeeze-dihkhtml

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By Rene Wagner

BERLIN (Reuters) – German exporters are in an “extreme price squeeze” and incurred extra costs of 70 billion euros ($69 billion) this year due to soaring producer and import prices, the Association of German Chambers of Industry and Commerce (DIHK) said on Wednesday.

According to surveys and calculations made by the Association, German companies raised the prices of their exported goods by 14.7% in the first half of the year, but producer and import prices rose about twice as fast.

The resulting burden on [German foreign trade amounts to 70 billion euros](https://www.financedigest.com/stellantis-to-invest-130-million-euros-in-german-plant-for-new-opel-electric-car.html "Stellantis to invest 130 million euros in German plant for new Opel electric car") for the first six months alone,” Volker Treier, head of foreign trade at DIHK, told Reuters.

[“German foreign trade finds itself in an extreme price](https://www.financedigest.com/german-residential-property-market-faces-risk-of-price-drop-diw-study.html "German residential property market faces risk of price drop – DIW study") squeeze, from which it will not be able to free itself in the next few months,” said Treier, as companies only pass on part of their higher costs to overseas customers.

One issue is the weakness of the [euro currency](https://www.financedigest.com/euro-having-a-laugh-a-quarter-of-brits-take-the-wrong-currency-on-holiday.html "Euro having a laugh: a quarter of Brits take the wrong currency on holiday"), which has fallen below parity with the dollar and tumbled to its lowest level in two decades, often making imported goods costlier.

Despite Russia’s invasion of Ukraine, [supply shortages and coronavirus lockdowns in China](https://www.financedigest.com/oil-prices-rise-as-china-eases-covid-curbs-u-s-storm-fuels-supply-worries.html "Oil prices rise as China eases COVID curbs, U.S. storm fuels supply worries"), German exports actually increased by 13% in the first half of the year.

But according to DIHK calculations, adjusted for inflation, the real values ​​are negative: [exports have fallen by 1.5%](https://www.financedigest.com/russias-rosatom-sees-2022-exports-growth-at-15-report.html "Russia’s Rosatom sees 2022 exports growth at 15% – report").

This means that German [foreign trade](https://www.financedigest.com/russian-central-bank-gives-legal-entities-green-light-to-trade-foreign-shares.html "Russian central bank gives legal entities green light to trade foreign shares") is already in a recessionary phase,” said Treier.

According to the latest DIHK business survey, [companies in key](https://www.financedigest.com/automotive-diagnostic-scan-tools-market-key-insights-profiling-companies-and-growth-strategies-by-2025.html "Automotive Diagnostic Scan Tools Market Key Insights, Profiling Companies and Growth Strategies by 2025") export sectors are particularly squeezed. For example, 17% of vehicle [makers say](https://www.financedigest.com/sega-sammy-says-it-is-considering-buying-angry-birds-maker-rovio.html "Sega Sammy says it is considering buying Angry Birds maker Rovio") they will not pass on cost increases to customers, and 35% of pharmaceutical companies also will not.

Currently there are no signs that this tense situation will be resolved quickly,” said Treier, adding that some companies also feared weakening demand in [major markets China](https://www.financedigest.com/keysource-awarded-major-contract-to-design-nationwide-network-of-data-centres-throughout-china.html "KEYSOURCE AWARDED MAJOR CONTRACT TO DESIGN  NATIONWIDE NETWORK OF DATA CENTRES THROUGHOUT CHINA") and the United States.

($1 = 1.0085 euros)

(Editing by Matthias Williams and Bernadette Baum)


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