February 8, 2017 / 10:44 AM / a year ago

UPDATE 1-German DIHK sees exports helping growth, protectionism a worry

(Adds quotes from trade group leader, engineering orders)

BERLIN, Feb 8 (Reuters) - Germany’s DIHK Chambers of Commerce raised its 2017 growth outlook in Europe’s biggest economy to 1.6 percent, helped by a strong rise in export expectations, but warned firms worry about U.S. trade policy.

The survey of 27,000 DIHK members, published on Wednesday, showed they expect exports to rise by 3 percent this year, up from a forecast of 2 percent in the autumn. This was the strongest rise in export expectations in three years.

Global trade is reviving, said the DIHK, driven by momentum from the U.S. economy and growth in China.

Export growth could exacerbate tensions with the United States, where top officials have criticised Germany and other countries for devaluing their currency to gain trade advantages.

“While exporters’ worries about demand from abroad wane, more companies see a danger in the political framework for business,” said the DIHK. Firms see possible protectionist measures from the U.S. and reciprocal steps, as well as Brexit and currency turbulence as risks, it said.

DIHK Managing Director Martin Wansleben told a news conference Britain’s vote last June to leave the European Union had already hit business, with trade between the two countries falling by 3 percent last year. “Trade with the United Kingdom has already suffered a significant blow,” he said.

In the autumn, the DIHK survey put economic growth expectations for 2017 at 1.2 percent for this year.

Possible plans by U.S. President Donald Trump to introduce protectionist measures had not yet affected German order books, Wansleben said.

Separately, the VDMA industry association reported that engineering production fell by 0.2 percent in 2016, according to preliminary data compiled by the German federal statistics office.

VDMA’s chief economist Ralph Wiechers said investors had grown more sceptical in the second half of the year, quashing hopes for an improvement. (Reporting by Gernot Heller; Writing by Madeline Chambers and Andrea Shalal; Editing by Paul Carrel and Tom Heneghan)

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