USA

01/29/2010

About 10% of German industrial exports are destined for North America.

About 10% of German industrial exports are destined for North America. The US economy is gradually working its way out of recession, and achieved growth in the third quarter of 2009; however, the US economy will have contracted by up to 3% in 2009. Growth impulses are particularly due to the economic stimulus program, which represents more than 3% of GDP. It remains to be seen whether this will fuel consumption. In October, the unemployment rate reached 10.2%, the highest rate in over 25 years. In particular, state and household debt levels do not leave much room for future programs and tax cuts. Despite these adversities, the US economy will slowly return to a more robust growth path over the course of the next two years. The BDI's industry associations expect German industrial exports to grow by 3.5% in 2010.

2.4% of German industrial exports are destined for Latin America. In recent years, the region became used to high growth rates, averaging 6% during the five years preceding the crisis. The financial market crisis has also affected the Latin American economies, causing GDP in the region to contract by more than 2% in 2009. German industrial exports to the region fell by 19% in 2009, a particularly severe drop. The region's prospects of overcoming the crisis in the nearer term are good, also as a result of comparatively low public and private debt levels. The OECD is expecting the Brazilian economy to grow by nearly 5% in 2010. Also, the 2014 Football World Cup in Brazil and the 2014 Summer Olympic Games in Rio de Janeiro will require considerable infrastructure investments beyond 2010, which will presumably also benefit the German economy. Despite a slight recovery in the region, the BDI industry survey indicates zero growth for German industrial exports to the region in 2010.