Exports from Germany will decrease in the next year for the first time since the global financial crisis that happened 10 years ago
Slowing global growth contributes to this fact, as described in the prognosis by German industrial and commercial chamber DIHK.
German economy is strongly dependent on exports. But exports suffer due to global growth slowing, trade disputes created by US president Donald Trump and uncertainties connected with Brexit. It should still increase in this year by 0.3 percent, last year exports grew by 2.1 percent. For the next year the outlook is a decrease of 0.5 percent.
“This is a huge challenge for our economy with a strong industrial core,” stated DIHK president Eric Schweitzer while presenting the newest poll among more than 28,000 managers. “DIHK did not receive such pessimistic responses since the financial crisis in 2008/2009,” added and warned that the average export growth usually floats around 5.5 percent.
Due to the unfavourable trade outlook, DIHK has also decreased this year’s growth outlook for German economy from 0.6 percent to 0.4 percent. In the next year, the gross domestic product (GDP) should increase by 0.5 percent, but this is caused mainly by unusually high numbers of vacancies. The German government as well as major trade institutes estimate, that German GDP will increase by 0.5 percent in this year. In the second quarter, GDP has decreased by 0.1 percent after it grew by 0.4 percent in the first quarter. If a shrink is noted also in the third quarter, it would mean that German economy has entered recession, which is usually defined as at least two back-to-back quarters with negative industrial growth.