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Germany records first monthly trade deficit in decades as economic crisis deepens

GERMANY reported its first monthly trade deficit in three decades today after exports fell unexpectedly in May leaving a shortfall of €1 billion (£860m).

Cross-border sales fell 0.5 per cent while imports rose by 2.7 per cent, much more than expected according to economic website Bloomberg. 

Analysts have blamed the situation in Ukraine along with lockdowns in China for global supply chain issues which they say have hit Germany’s export-orientated economy hard. 

The country is already facing gas and hot water shortages as it tries to end reliance on Russian imports because of European Union-imposed sanctions over the Russia’s invasion of Ukraine.

Over the weekend, Hamburg senator Jens Kerstan said that the city was contemplating limiting the temperatures in heating networks. 

“We are in a much worse crisis than many realise,” he said. 

Residents are advised not to take baths, have short showers and turn the heating down during peak periods. 

Mr Kerstan said that the measures were necessary to avoid the shutdown of the industry because of severe gas shortages. 

German Vice-Chancellor Robert Habeck said in a recent interview with Der Spiegel that he has started to wash less often to save energy. 

European economies have been plunged into crisis with a number of countries recording their highest levels of inflation for decades. 

Spain became the latest country to report a steep rise as inflation hit its highest levels since 1985 yesterday, surging to 10.2 per cent in June from 8.7 per cent the previous month. 

The sharp increases have been attributed rocketing energy prices.

Gazprom reduced supplies via Nord Stream last month with a number of countries exploring alternatives. 

One option is the supply of liquefied natural gas from the United States.

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