UPDATE 1-Trump, Brexit bite into German growth outlook - BDIDevdiscourse News Desk | Updated: 25-09-2018 13:33 IST | Created: 25-09-2018 12:43 IST
Germany's BDI industry association on Tuesday lowered its 2018 growth forecast for Europe's largest economy, citing weaker demand for German goods due to increased business uncertainty caused by U.S. President Donald Trump's trade policy and Brexit.
The German economy is now expected to grow by 2.0 percent this year, down from a previous estimate of 2.25 percent, BDI President Dieter Kempf said. Exports will rise by 3.5 percent in real terms, below the BDI's initial forecast of 5 percent.
On the one hand, the global economic recovery has reached its peak, leading to less dynamic demand for German machinery and equipment, Kempf said. "On the other hand, German companies are facing risks with each protectionist measure - even if it is targeted against China," Kempf said.
China is Germany's most important trading partner and the United States is its biggest single export destination. An escalating tit-for-tat tariffs dispute between Washington and Beijing is, therefore, hitting German exporters as well.
The German growth outlook is also clouded by an impasse in Britain's negotiations with its European Union partners over the conditions of its departure from the bloc next March. Britain is Germany's fifth most important export destination.