German exports may reach their pre- crisis level by the end of next year as demand from emerging markets including China buoys growth in the face of a sputtering U.S. economy, the head of Germany’s export group said.
Rising exports may spur economic expansion of 3 percent in Germany this year, Anton Boerner, head of the Berlin-based BGA wholesale and export federation, said in an interview today. Even as a weakening in the U.S. recovery threatens to slow growth in Europe’s largest economy to as low as 1.25 percent in 2011, the current boom may wipe out export losses following the crisis by next year, he said.
“As a whole, I think it’s quite a good prediction to believe the end of 2011 will reach the level of 2008,” Boerner said by telephone from southern Germany. Regarding the sustainability of the boom, he said: “I don’t believe it will disappear.”
German exports grew more than twice as much as economists expected in June, climbing out of a slump during the worst recession since World War II and helping to fuel 2.2 percent growth in the second quarter, the fastest since reunification in 1990, a report today showed. Germany is benefiting from the revival of global demand following the recession and a decline of the euro against the U.S. dollar.
Still, even if the U.S. avoids a double-dip recession, the recovery in the world’s No. 1 economy “will come down quite remarkably,” Boerner said. U.S. Federal Reserve officials this week pledged to maintain measures to bolster economic growth amid high unemployment and fading growth.
German sales abroad were bolstered by a decline of the euro against the dollar of as much as 17 percent since the beginning of the year and June 7. The euro has recovered 7.4 percent since then, bringing the year-to-date drop against the U.S. currency to 11 percent, and traded at $1.2805 at 3:04 p.m. Berlin time.
The volatility doesn’t pose a threat to German companies, which have “a really good chance” to hedge their positions for the next two years, Boerner said. Instead, he cited the possibility that mounting U.S. deficits could foster a depreciation of the dollar similar to before the crisis, when the euro surged to $1.5938 in July 2008.
“I feel more a dollar crisis in the next two years than a euro crisis,” Boerner said, though “right now I think it’s not something that really concerns us.”