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Foreign trade saps German growth

Wednesday, January 16, 2013 - 01:40

Jan. 16 - Export powerhouse Germany expects foreign trade to be a drag on economic output this year as the euro zone crisis saps demand in neighbouring states, although consumers at home should support growth. Joanne Nicholson reports

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It's not quite Paris or Milian but fashionistas have been flocking to Berlin for this year's Mercedes-Benz fashion week. The event's auto-making sponsor is of course one of Germany's best known exports. And they're pretty important when it comes to the euro zone. Germany's latest economic outlook was being watched almost as much as the catwalk models. Economy Minister Philipp Reosler released the annual report. It suggests foreign trade could drag this year - but growth forecasts at home - currently under half a percent - should make up for that longer term. (SOUNDBITE) (German) GERMAN ECONOMY MINISTER, PHILIPP ROESLER, SAYING: "The 0.4 will be quickly replaced by significantly stronger growth figures of 1.6 percent in 2014 because we are anticipating better growth rates. This shows that the German economy is not only robust but continues to be a leader on the job market and in economic growth." Germany expects exports to grow by 2.8 percent with imports up 3.5 percent Schroders' Gareth Isaac says there's no cause for alarm. (SOUNDBITE) (English): GARETH ISAAC, SCHRODERS, SAYING: "The German Economy is obviously feeling the heat from the slowdown in the global economy that we saw in the second half of last year. But I do think that as the global economy, and especially in emerging markets, pick up over the next six to twelve months, that the German economy will be able to improve because they export so much there." 40 percent of German exports are to the euro zone. And the decline there hasn't been helped by a recent slowdown in China. Germany is clearly no longer immune to euro zone woes. But it still knows how to put on a show and the current relative malaise is not expected to last.

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Foreign trade saps German growth

Wednesday, January 16, 2013 - 01:40