German exports to Britain fall

The impact of Brexit on German exports to Britain has been considerable, according to a latest report from the Cologne Institute for Economic Research (IW Koeln), a private economic research body in Germany.

According to the report, German exports to Britain have declined considerably since the Brexit referendum vote which took place on June 23 of 2016, in part due to a 10-percent depreciation in the value of the British pound.

Jurgen Matthes, senior economist with the IW Koeln, and co-author of the report, told Xinhua that "a major part of the short-term effects on German exports to the UK appear to have occurred in the second semester of 2016, however without seriously impeding German economic growth."

German economic growth has remained strong, increasing 1.9 percent in 2016, while exports hit a record high of 1.21 trillion euros (1.31 trillion U.S. dollars).

"At the same time growth in the UK has hardly budged," he added, suggesting that the short-term effects so far on Britain of Brexit have been surprisingly low.

In the second half of 2016, German exports fell 7.2 percent compared with the same period the year before. For the fourth quarter, German exports declined further to 9.3 percent year on year from a year ago.

The worst-affected sectors of the economy were the pharmaceutical sector, whose exports fell 20 percent and the automobile sector with an 18-percent fall.

The report suggested it is possible the worst effect has already been felt in the second half of 2016 and that, if the British pound maintains its value, German exports may pick up in the second half of 2017.

As to whether it is Germany or Britain. who has the most fear from Brexit, Matthes said "On the contrary, the long-term negative effects of Brexit will ultimately fall much more on the UK than on Germany or the EU."

With Britain due to make a declaration it intends to leave the European Union under Article 50 Wednesday, the two-year countdown to Brexit will formally begin. Endit