Berlin [Germany], May 3: The Russia-Ukraine conflict and the sanctions imposed in response were causing new disruptions in global supply chains which were already under "great pressure" from the COVID-19 pandemic, Germany's state-owned promotional bank KfW said on Monday.
The overall share of small and medium-sized enterprises (SMEs) affected by material shortages declined from 48 percent in September last year to 42 percent in March. This was solely due to the services sector, which was "much less reliant on inputs than other economic sectors," KfW noted.
By contrast, in manufacturing and construction, the share of German companies struck by supply shortages remained particularly high at 78 percent. In wholesale and retail, the share had risen by five percentage points since fall and reached 68 percent, according to KfW.
The shortage of materials also led to price adjustments as one in four German SMEs raised its prices recently. "Supply bottlenecks thus remain a major driver of inflation, along with energy prices," KfW noted.
In 2020, Germany's foreign sales slumped by around 11 percent year-on-year. KfW expects an increase of around 6 percent to 566 billion euros (595 billion U.S. dollars) in 2021. "That volume is still below the pre-crisis level," said Fritzi Koehler-Geib, chief economist at KfW.
The development of foreign business by SMEs in the current year 2022 was "difficult to predict," KfW noted. "There is great uncertainty as to how long the disruptions to global supply chains will last." (1 euro = 1.05 U.S. dollars)
Source: Xinhua