The coronavirus outbreak in China poses a risk for the German economy, Germany’s central bank said on Monday, pointing to a drop in demand from China.
“A temporary decline in the aggregate demand in China may dampen German export activity,’’ its experts wrote in the Bundesbank’s monthly report for February.
The world’s second-largest economy is a key market for goods made in Germany.
At the same time, China manufactures numerous products, also for further processing in other countries.
The safety precautions that have been introduced due to the coronavirus could affect some global value chains, leading to supply bottlenecks in individual sectors in Germany, the monthly report said.
Following a weak end to 2019, the central bank does not expect any radical economic changes in Germany during the first quarter of this year.
The German economy slipped into a lull in 2019, after booming for years due, in part, to international trade conflicts, which affected above all the country’s export-oriented industrial sector.