BDI: German Economic Growth Pressured by Brexit and US Trade Policy
German BDI industry association expects the Germany’s economy to increase by 2.0% this year, down from a previous estimate of 2.25%. Exports will rise by 3.5% in real terms, below the BDI's initial forecast of 5%. Lowering of the economic growth forecast was caused by many factors, including the UK’s exit from the EU and the US trade protectionism.
"The trade policy of US President Trump, but also the approaching Brexit are dampening investment activity worldwide and with it German export business," BDI President Dieter Kempf said. According to Brexit, Kempf said there must be a breakthrough on getting a Brexit deal in the coming weeks to ensure a transition period that would give firms legal certainty until the end of 2020.
The Europe's biggest economy has been growing for nine years, but the German economy, with its export-oriented manufacturing sector and an overall export quota of nearly 50%, faces a threat from global business and trade uncertainty, Kempf said.
Meanwhile, increased trade tension between the US and China also hits German exporters, as China is Germany's most important trading partner and the United States is its biggest single export destination.