Germany's exports should grow some 16 per cent this year and up to 7 per cent in 2011, its exporters association forecast today, though it warned that currency tensions may lead to a rise in protectionism.
Foreign Trade Association (BGA) president Anton Boerner told reporters in Berlin the group expected Germany would export goods worth at least one trillion euro for the first time next year following a sharp rebound in foreign demand in 2010.
"All in all, we're predicting the strongest increase in foreign trade for ten years in 2010," he said. "For 2011, I expect exports to grow by up to seven percent to 1,003 billion euros."
Mr Boerner said the biggest risk to German exporters was a currency devaluation spiral and said that a depreciation in the value of the US dollar was likely to continue due to its expansive monetary policy.
"The biggest risk factor for me is the problem of devaluation arising from the dollar," said Mr Boerner.
Tariffs on Chinese imports being discussed in the United States were dangerous, he said.
"When such a big country takes such measures, then other countries will and must follow suit."
Germany was long the world's biggest exporter of goods until it was overtaken by China last year. German exports fell sharply in 2009 - when the economy suffered its sharpest downturn since World War Two - but have bounced back this year.
Leading research institutes advising Chancellor Angela Merkel's government last week forecast German exports to rise 15.3 per cent in 2010 and 7.1 per cent in 2011. German exports fell in August for a second straight month, narrowing the trade balance and adding to concerns that a stronger euro may weigh on the pace of the economic recovery.
Separately today, the influential ZEW think tank said that while the outlook for consumer spending in Germany was healthy, export growth will likely be more muted.
Mr Boerner said it was time China turned its back on "unfair trading practices on raw materials" and took steps to ensure a "realistic exchange rate" for the yuan currency.
"However, we also reject resorting to general China bashing. By no stretch of the imagination can we see a 'yellow peril,'" he added. "China is always welcome as a partner for trade and investment provided it sticks to the rules of the game."
The BGA forecast imports would rise by some 17 per cent this year by up to 8 per cent in 2011.
Reuters