BERLIN (Reuters) – The German economy is losing steam as rising trade tensions abroad and a lack of skilled workers at home limit the growth prospects for Europe’s largest economy, Economy Minister Peter Altmaier said on Thursday.
FILE PHOTO – People walk through the Mall of Berlin shopping centre during its opening night in Berlin, Germany, September 24, 2014. REUTERS/Thomas Peter/File Photo
Presenting the government’s downwardly revised growth forecasts, Altmaier said that the German economy would grow by 1.8 percent in both 2018 and 2019.
This compared with earlier projections of 2.3 percent and 2.1 percent respectively. In 2017, the German economy grew by a calendar-adjusted 2.5 percent.
Germany’s vibrant domestic economy will continue to propel growth this year and next, with imports rising at a faster pace than exports and net trade expected to hold back an upswing that is seen entering its tenth year in 2019, Altmaier said.
“This is the longest upswing since 1966, the second longest ever,” he added, pointing to record-high employment, rising real wages and planned tax relief for workers.
Altmaier said, however, that Germany’s growth outlook was clouded by protectionist tendencies and international trade disputes. The economy would also expand at a faster rate if companies found skilled workers more quickly, he added.
The center-right minister called for swift implementation of an EU-U.S. tariffs deal reached earlier this year to solve a transatlantic trade conflict.
Germany and its European allies will also support efforts to safeguard the rules-based free trade order by reforming the World Trade Organization (WTO), Altmaier said.
The government’s updated growth forecast confirmed a Reuters report on Wednesday that showed Berlin views an escalation in the global trade dispute as the main risk for the future.
The minister also blamed revisions to previously reported output data and slower production in the auto sector due to difficulties adjusting to a new pollution standard – the Worldwide Harmonised Light Vehicle Test Procedure (WLTP).
Reporting by Michael Nienaber; Editing by Maria Sheahan