Although Romania has the lowest share of gross value added in German exports and final demand, according to an analysis by Erste Group, it will be quite strongly affected by the economic shock in Germany.

One reason is that the Romanian automotive value chain supplies components with low added value. Romanian suppliers are small and less integrated in value chains also due to geographical distance. So it is natural that German production, when demand falls, cuts orders to less important and more distant suppliers to also save money.

In case of a shock to German GDP of -0.5% (quarterly), the Czech Republic will be the most affected country, followed by Romania (where the shock will still be absorbed quickly). For Poland and Slovakia, the impact is delayed by a quarter, and the absorption of the shock will be much slower than in Romania or Hungary.

Thus, German export figures are of particular importance for the region. From this point of view, the recent slowdown in the growth of German exports is a negative factor for the development of Central and Eastern Europe, the analysis shows.

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The German economy may shrink in the third quarter as industry is in recession and private consumption has a limited contribution to economic growth, the German central bank (Bundesbank) said in its monthly bulletin on Monday. a brief downturn at the start of the year and zero growth recorded in the second quarter. Under these conditions, a contraction between July and September would mark the fourth quarter in a row in which Germany recorded negative growth or stagnation.

In 2022, Romania exported goods worth 18.24 billion euros and imported 22.4 billion euros