German trade association slashes 2013 export, import forecasts
BERLIN (Reuters) - Germany's BGA trade association on Monday slashed its forecasts for exports and imports in 2013 and said trade would not contribute to growth in Europe's largest economy this year due to a slower-than-expected global pickup.
BGA President Anton Boerner also said the euro zone debt crisis was weighing heavily on demand for German goods, with recession in southern Europe likely to worsen in the short-term, and expressed particular concern about Italy's prospects.
"How the situation in the euro zone develops will be decisive for a sustainable improvement of trade," Boerner told reporters in Berlin.
"I am increasingly pessimistic about the ability to reform of those countries particularly hard hit by the debt crisis."
"The situation in Italy in particular promises nothing good, given that the main forces in society do not seem interested in comprehensive structural reform," he added.
Italian Prime Minister Enrico Letta's new government was sworn in on Sunday and he will seek the backing of parliament in a vote of confidence later on Monday, months after an inconclusive election in the euro zone's third largest economy.
Germany's economy long proved resilient to the euro zone crisis that has sent much of the rest of the bloc into recession but it contracted in the final quarter of 2012.
Data now show Germany struggling to leave that gloom behind, especially because of weakness in the Chinese economy which had proved a strong alternative market for German exports.
The economy has not yet featured prominently in Germany's election campaign but if it worsens significantly it could become a headache for Chancellor Angela Merkel as she seeks a third term in office in September.
The BGA cut its forecast for exports to a rise of 3 percent from a November forecast of 5 percent, with Germany's share of global goods exports shrinking slightly.
The association also reduced its forecast for imports to a rise of just one percent from a previous estimate of 5.5 percent, mainly due to easing energy prices as well as favorable exchange rates.
"The recovery in the world economy is keeping us waiting and is set to be less dynamic than previously assumed," Boerner said. "As such, the strong growth rates in trade that we had got used to in the past years are now a thing of the past."
Trade will not contribute as usual to German growth this year, Boerner said, adding that he saw the economy expanding between 0.7 and 0.8 percent. This is above the government's official forecast, which it raised last week by 0.1 percentage points to a meager 0.5 percent.
Boerner said he saw no short-term danger of a global race to depreciate currencies following Japan's new policy of aggressive monetary expansion that has driven down the value of the yen.
(Additional reporting by Gernot Heller, editing by Gareth Jones)
- Air strike kills 15 civilians in Yemen by mistake: officials
- North Korea executes leader's powerful uncle in rare public purge |
- Twitter backtracks on block feature after users revolt
- Pope attacks mega-salaries and wealth gap in peace message
- Insight: In Yemen, al Qaeda gains sympathy amid U.S. drone strikes