Brexit can shrink German economic growth next year by 0.25%, according to the least not yet published study based in Cologne Institute for Economic Research (IW). According to the economists from the institute, the immediate consequences of Brexit are the depreciation of the GBP and the significant contraction of the British economy.
The exports, which traditionally is the main engine of the German economy, will probably shrink by 9% yoy in 2017 due to the weak British pound. Last year, the German companies exported goods worth about 89 billion EUR for the UK, which is the third most important destination for Germany.
Researchers from the Cologne Institute for Economic Research explained that the weaker GBP, along with the expected fall in UK growth will lead to lower growth of German economy, even before Britain to leave the EU. The imports of Germany is also likely to decline by about 3.5%.
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