Germany’s current account surplus shrank for the fifth year in a row in 2020 as China overtook Europe’s biggest economy during the Covid-19 pandemic.
China now has the world’s largest current account surplus, a survey by the Institute for Economic Research (IFO) in Munich released on Friday shows.
The data underlines a massive shift in world trade triggered by the coronavirus crisis, Reuters reports.
IFO said China’s current account surplus, which measures the flow of goods, services and investments, more than doubled to US$310 billion last year.
Higher demand around the globe for medical protection gear and electronic devices has boosted Chinese exports.
Germany’s current account surplus shrank to US$261 billion in 2020 as demand for cars, machinery and equipment fell in many of its key export markets.
The survey showed Japan came in third with a current account surplus of US$158 billion.
Measured in relation to economic output, however, Germany’s current account surplus remained unusually high at 6.9% last year, edging down only slightly from 7.1% in 2019.
By comparison, China’s current account surplus last year stood at 2.1% and Japan’s at 3.2%, according to the survey.
The US still has the world’s largest current account deficit which rose by roughly a third to US$635 billion in 2020 or 3.1% of economic output, the IFO survey showed.
This suggests that former President Donald Trump failed to push down the trade deficit despite his “America First” agenda of protecting industrial jobs by increasing import tariffs on foreign goods.