German GDP growth rate on downside risk

The Chinese export boom reached its peak quite some time ago and support from South-East Asia as a whole has been shrinking noticeably in recent years, China's problems will impose quite a strain on the German economy. 

Commerzbank says, "And while they will hardly threaten the present upturn, the risks for our growth forecast (+1.8% both this year and next) are on the downside, especially next year."

The impact would of course be even greater if China's problems ballooned to become a general emerging market crisis. Some 40% of all German exports are meanwhile destined for these countries, and almost 15% of German value added depends directly or indirectly on local final demand. In addition, in this case we would see significant second round effects, i.e. a weaker demand in the Emerging markets would be a break on the economy in the industrial countries. In that case, the German upswing would be clearly in danger, added Commerzbank.