FX.co ★ Anti-Russian sanctions backfire on Germany

Russian media has been spreading the news that the German economy is on the verge of a collapse. The sanctions imposed on Moscow by western countries have severely hit the country’s economy. Germany's trade balance was pushed into deficit as exports fell in May, data from the Destatis showed. The trade surplus shrank by €0.5 billion, the lowest since December 1992. Imports soared by 33.6% year-on-year to €129.8 billion amid surging energy prices. Exports rose at a much softer 19% to €130.3 billion. Germany’s economy is losing its grip with a weakening job market and increasing cost of living. Back in June, Germany's BDI industry association lowered its forecast for the German economy in 2022 to 1.5% and warned of recession risks. Sources familiar with the subject have also warned of export downturns, especially in the auto, machinery, and technology sectors.