Economic Impact of Rising Inflation and Savings Expectations on German SMEs and Ways Forward

By calculations of the Procurement Initiative, German SMEs face a three-digit billion-euro additional financial burden per year due to soaring inflation rates, persistent savings expectations by large companies (especially OEMs), and lower GDP growth. The numbers range from 113bn€ in a best case scenario up to 228bn€ in a worst case scenario. The consequences of not actively coping with this problem will be nothing but risking the competitive position of Germany`s strong SME backbone since necessary innovation programs in new technologies can not be funded anymore. To counteract a joint collaboration approach between OEMs, SMEs and policymakers is required.

Parts of this article have been published in the leading German business magazin "Handelsblatt" on May 20th, 2022.