German industry views Brexit, Trump as biggest risks to economy

Author: 
Reuters
ID: 
1545817208894546500
Wed, 2018-12-26 09:00

BERLIN: Germany’s leading industry groups said on Wednesday
that Britain’s departure from the European Union and trade
disputes triggered by US President Donald Trump’s ‘America
First’ policies were posing the biggest risks to growth and
prosperity.
The German economy, Europe’s largest, is expected to post its
weakest growth rate in many years in 2018 as exporters are facing
headwinds from abroad. But vibrant domestic demand means many
companies are still able to expand business.
In a survey conducted by Reuters, the heads of Germany’s leading
industry associations said they did not see the economy entering a
recession and that most forecasts were predicting a solid growth
rate of around 1.5 percent for 2019.
But the industry associations said the economic woes of company
executives were increasing and the government should do more to
help them, for example by lowering corporate taxes and investing
more in digital infrastructure.
“The biggest risk in the short term is Brexit,” said Dieter
Kempf, president of the BDI industry association.
If Britain left the EU in March without any agreement on its future
relations with the bloc, this would create massive uncertainties
for trade and business, Kempf warned.
“The British economy would face the direct threat of a recession
which would indirectly also affect Germany,” Kempf said.
Holger Bingmann, head of the BGA trade group, said Brexit was the
“most urgent problem for the German economy” while an
escalation of international trade disputes sparked by the United
States could potentially derail the economic upswing.
DIHK President Eric Schweitzer said German companies are still
worried about the US imposing higher import tariffs on European
cars. “The threat of car tariffs is still on the table,”
Schweitzer warned.
It was vital that both sides increased their efforts to find a
solution to the trade dispute through negotiations that ideally
would lead to lower tariffs, Schweitzer said.
The German economy likely grew by around 1.5 percent this year,
compared with 2.2 percent in 2017.

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Source: FS – All-News-Economy
German industry views Brexit, Trump as biggest risks to economy