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To: yard_man who wrote (262389)	10/1/2003 8:13:33 PM
From: Haim R. Branisteanu	Respond to of 436258

German Exporters Say Economic Recovery May Be Slow (Update1) Oct. 1 (Bloomberg) -- The German economy, Europe's largest, may be slow to revive after a three-year slump as orders from some of its foreign trading partners may barely grow, the BGA association of exporters and wholesalers said. The lobby, which represents 135,000 companies, said exports will probably grow 3.5 percent this year and 4.5 percent in 2004. Exporters are optimistic about business with regions such as eastern Europe and Asia while being glum about sales to the U.S. and Europe, the BGA said in a report. ``There are risks for the world economy and foreign trade,'' BGA President Anton Boerner said at a press conference today in Berlin. ``A further abrupt appreciation of the euro against the U.S. dollar far beyond $1.20 would be a burden for exports,'' said Boerner, who expects the euro to rise to more than $1.25 in the second half of 2004. Exports, equivalent to about a third of Germany's $2.3 trillion economy, last year saved the country from recession. The dozen- nation euro economy, destination of more than 40 percent of Germany's foreign sales, will expand a mere 0.5 percent this year, the International Monetary Fund said, cutting its forecast in half. German Chancellor Gerhard Schroeder on Monday said the euro's exchange rate against the dollar is one of the ``dangers'' threatening the country's recovery from three years of stagnation. German sales of goods abroad reached 648 billion euros ($756 billion) last year, up 1.6 percent from 2001. Threat of Euro Appreciation BASF AG, the world's biggest chemical maker, derived 8 billion euros of its 32 billion euros in 2002 sales from the U.S., Bloomberg figures show. BASF shares have fallen 11 percent since finance ministers from the seven most industrialized nations signaled last week they're prepared to let the dollar fall. Exports, adjusted for seasonal and price changes, rose to 168.3 billion euros in the three months ended in June, 1 percent shy of the 170 billion euros reached in the third quarter of 2002, the highest in at least four years. The euro's gain ``hasn't had an impact yet, but I can't rule out that a continuation of the euro appreciation could have a negative impact,'' Gernot Nerb, the economist at the Ifo economic research institute responsible for compiling a survey of 7,000 companies, said last Thursday. Europe's single currency traded at $1.1666 at 10:39 a.m. in Berlin, up 1.7 percent in a week and 1.8 percent below a record high reached in May. The U.S. budget and trade deficits ``would inescapably lead to a further rise of the euro should the U.S. administration's tax reductions fail and the U.S. economy stall,'' Boerner said. A possible increase in oil prices may add to pressure on the dollar, he said. German business confidence rose to a 2 1/2-year high in September, boosted by expectations that future business will improve. An index measuring the assessment of current the current business situation dropped. Last Updated: October 1, 2003 05:30 EDT