Expect the unexpected in 2017, German industry leaders warn
The Brexit vote, the U.S. presidential election and nationalism and terror attacks at home are all casting shadows on Germany’s economic outlook for 2017, several industry leaders said in a Reuters survey.
The leaders of the German Industry Association (BDI), the Chambers of Commerce (DIHK) and the Employers’ Association all expressed fears about uncertainties, especially with elections in Germany and France due in 2017, and protectionist trends in some countries.
“Expect the unexpected,” BDI President Ulrich Grillo told Reuters. “The level of global uncertainty has increased as has the unpredictability. Unfortunately I fear that won’t change very much in 2017.”
Britain’s referendum decision to leave the European Union and Donald Trump’s victory in the U.S. presidential election surprised pollsters and markets around the world. Chancellor Angela Merkel and her conservatives are expected to win a fourth consecutive term in September but uncertainties such as terror attacks are clouding the picture and such expected outcomes should be no longer taken for granted, the industrialists said.
Grillo said he fears political instability could increase due to a combination of growing self-doubt in the west, autocrats flexing their muscles elsewhere and the rise of populists.
Anton Boerner, head of the German trade association (BGA), said all the external uncertainties were weighing on export firms.
“Nationalist trends are poison for society as a whole and Europe needs to be reminded of all that it has in common,” said Ingo Kramer, president of the Employers’ Association. He said an increase in protectionism would be devastating for Germany which relies on exports for about half of its economic output.
Eric Schweitzer, the leader of the DIHK, saw considerable risks for Germany related to Brexit as well as Trump’s election.
“I fear there is something deceptive about the relatively good economic situation right now,” he said. “The Brexit vote could still hit the EU economy and especially the German economy. Donald Trump’s critical comments on free trade in his campaign are causing a lot of uncertainty at German companies.”
Association of Skilled Trades president Hans Peter Wollseifer underlined the challenge of integrating hundreds of thousands of refugees who have arrived in the last 18 months.
All the industry leaders said they hoped Merkel’s conservative party, along with the other parties campaigning ahead of the election expected in September, would focus on industrial competitiveness and the creation of jobs in areas with bright futures.
In October, Germany lowered its economic growth target for 2017 to 1.4 percent from 1.5 percent.
(Writing by Erik Kirschbaum; Editing by Ruth Pitchford)
This content appears as provided to The Globe by the originating wire service. It has not been edited by Globe staff.