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Tuesday, 23 April 2024

German economy to slow further in 2020 - BDI

Duration: 01:36s 0 shares 4 views

German economy to slow further in 2020 - BDI
German economy to slow further in 2020 - BDI

Germany's economy suffered its weakest expansion since 2013 last year, and is seen as likely to slow further in 2020.

David Pollard reports.

Europe's heavy lifter Germany lost muscle power last year ... And could get weaker still this year.

A warning from its industry association, the BDI, expects a growth rate of just 0.5 per cent.

Last year's 0.6 was already less than half the year before And the worst performance since 2013.

The outlook: still clouded by trade tensions, according to BDI chief, Dieter Kempf.

(SOUNDBITE) (German) BDI PRESIDENT, DIETER KEMPF, SAYING: "We believe that the present deal between the United States and China is only a breather and we are far from an end to the trade conflict." Exports and imports were both also down by around half on the year before, according to official figures this week.

One analyst told Reuters Germany would be in recession were it not for strong private consumption, state spending and construction.

Manufacturing suffered badly: a slump of 3.6 per cent also pointing to the plight of its mighty carmakers.

New emissions standards and the shift to electric are hitting them hard.

The German slowdown has prompted calls for a fiscal boost to the economy.

And with a public sector budget surplus of close to 50 billion euros last year, Germany might afford it.

The BDI though is calling for cuts to the tax burden.

(SOUNDBITE) (German) BDI PRESIDENT, DIETER KEMPF, SAYING (on GERMAN TAXES): "Companies on average are taxed more than 31% while the EU average is only 22%.

Our demand therefore is that Germany must steer towards 25% for companies." One longer-term positive has come from the new data.

In 2019, Germany grew for the tenth year in a row - in its longest period of growth since reunification in 1990.

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