Export prospects are likely to be hit by these uncertainties, especially the longer they linger. This also needs to be seen against the backdrop that the upward trend in the global economy is anyway not robust given hiccups in a number of major emerging markets.
Nonetheless, we are currently assuming that this is merely a temporary blip in industrial sentiment – particularly given that the services sector remains very upbeat. Following the buoyant growth seen in the first quarter of this year, German gross domestic product is likely to have risen only moderately by an estimated 0.3% in the second quarter. We are still expecting average growth of 2.0% in 2014. But in view of the less optimistic business surveys of late, hopes of 2014 growth significantly above 2% are likely to have been dashed.