Germany’s economic woes may wipe £6bn off UK GDP as 10% of the UK’s exports to Europe go to Germany
- Germany has seen worst collapse in its industrial sector since the financial crisis
- Its woes threaten to wipe 0.3% off Britain’s national income
Germany’s economic woes threaten to wipe 0.3 per cent off Britain’s national income as exports are hit, economists warn.
Germany is believed to have slipped into recession after data last week showed the worst collapse in its industrial sector since the financial crisis.
About 10 per cent of the UK’s exports to Europe – or £35billion of a total £350billion in 2018 – go to Germany, a key destination for British machinery, vehicles, aircraft, pharmaceuticals and electronic appliances.
Economic turmoil has caused exports to Germany to plunge by an average of 15%
But economic turmoil has caused exports to Germany to plunge by an average of 15 per cent year on year in the five months to May, according to the IMF. This followed an 8 per cent rise in 2017 and a 3 per cent rise in 2018.
George Buckley, chief UK economist at Nomura Bank, calculated that if the trend continued it would wipe £6billion off the UK’s annual gross domestic product – a fall of 0.3 per cent.
‘This is just the effect of the slowdown in Germany – not the rest of Europe,’ he said. ‘And it is only for goods, not services.’