German exports to Russia experienced a steep decline last year and will continue to fall in 2023.

(Patria) - German exports to Russia dramatically decreased in 2022, as European Union sanctions targeted Moscow over the war in Ukraine, and German companies ended their operations in the country, the German Eastern Business Association announced, Reuters reported.

German exports to Russia fell by 45 percent year-on-year to close to 15 billion euros in 2022, the lowest level in two decades, the association stated.

"The disentanglement from the Russian market is progressing rapidly and will continue in 2023," said Michael Harms, CEO of the aforementioned German business association at a spring press conference in Berlin.

While the German economy has managed to adapt surprisingly quickly to a world without Russian energy supplies, the Russian economy is heading into a crisis, according to the same association. Although the Russian economy will not collapse overnight, Harms said that "sanctions, the withdrawal of foreign companies, and the exodus of hundreds of thousands of young workers have a toxic effect."

The decline in exports to Russia has been more than compensated by a double-digit increase in exports to other markets in Central and Eastern Europe, Harms said. German trade with Central and Eastern Europe rose to a new high of 562 billion euros in 2022.

As a result, 29 Central and Eastern European countries continued to contribute 18 percent of Germany's total foreign trade, more than China and the United States combined.

With a decline of only 7 percent in 2022, trade with Ukraine fell less than would be expected given the dramatic situation and is even on the path to recovery since late autumn, Harms said.