The international ostracism of Russia due to the invasion of Ukraine is causing the German digital economy to suffer billions in lost sales.

The business of IT and telecommunications companies with Russia shrank by a quarter to 32.46 billion euros in 2022, the industry association Bitkom announced on Thursday. A further decline of 5.6 percent to 30.64 billion euros is expected for the current year. In previous years, some companies had recorded double-digit percentage growth.

"The entire Russian ICT market is now only the size of Baden-Württemberg," said Bitkom CEO Bernhard Rohleder. "Only hackers are still booming in Russia." Against the backdrop of Western sanctions, numerous companies have withdrawn from Russia in whole or in part.

Overall, Bitkom is positive about the prospects for the digital sector. German companies are expected to generate a total turnover of more than 200 billion euros for the first time in 2023. The global market is expected to grow by 4.8 percent to 4.33 trillion euros.

(Report by Hakan Ersen, edited by Ralf Banser. If you have any queries, please contact our editorial team at berlin.newsroom@thomsonreuters.com (for politics and the economy) or frankfurt.newsroom@thomsonreuters.com (for companies and markets).)