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German GDP growth slows amid Brexit risk

Tuesday, November 15, 2016 - 01:51

Germany's third quarter growth slowed more than expected in the third quarter of 2016 as exports fell amid the uncertainty of Brexit. As Kate King reports, the UK isn't the only country threatening Germany's economy.

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Germany's economic growth slowed in the third quarter, hit mainly by weaker export figures. The blame laid squarely on Britain's doorstep. German exporters say they're struggling amid the uncertainty surrounding Brexit. The economy grew by 0.2 percent in the July-September period, slightly less than the 0.3 percent forecast. SOUNDBITE (English) OANDA SENIOR MARKET ANALYST, CRAIG ERLAM, SAYING: "The consumer in Germany plays a much bigger impact on employment low wages are growing and there is less now, less reliance on the export sector, but ultimately I think this is just a one off weak figure from Germany I think it is a very robust economy and I expect decent growth figures to continue." But the UK isn't Angela Merkel's only problem, and she knows it. The German Chancellor using a business conference in Berlin to warn against protectionism in a thinly veiled reference to U.S. president-elect Donald Trump. SOUNDBITE (German) GERMAN CHANCELLOR, ANGELA MERKEL, SAYING: "Globalisation is a reality and we can shape it in such a way that we strengthen multilateral instruments. Or we seal ourselves off and become protectionist, and each individual tries to keep as much of his own national product as possible." Trump believes international trade agreements have hurt U.S. workers and he's promised to "get tough" on such deals. The U.S. is Germany's single most important trading partner. Around 123 billion dollars worth of goods were sold there last year - meaning any change in trade agreements, will leave a mark. Merkel too is under pressure from the same sentiment that elevated Donald Trump. SOUNDBITE (English) OANDA SENIOR MARKET ANALYST, CRAIG ERLAM, SAYING: "There is a risk that momentum is going to carry through to the euro area and shall we see this materilise in Germany, France of Italy then I think the eurozone has some big issues going forward. " Italy will be next to test the strength of anti-establishment feeling. A referendum on reform is now less than three weeks away.