Germany's export sector is in good shape and is unlikely to be hurt by the Volkswagen scandal, although concerns remain about the economic slowdown in China, the BGA exporters' federation said on Tuesday.

"In the first half of this year, Germany's foreign trade exceeded all expectations," BGA chief Anton Boerner told a news conference.

"Despite a number of different stumbling blocks ... we're confident about the outlook for the coming months, too. And we expect to reach new records both this year and next year," Boerner said.

"But we mustn't let ourselves be deceived by the positive figures," he cautioned, warning of "huge challenges ahead."

For this year, the federation was projecting export growth of six percent to 1.191 trillion euros ($1.3 trillion), Boerner said.

That was even more optimistic than the 4.5-percent increase that it had forecast in March.

Imports were projected to increase by four percent to 947 billion euros.

In the first six months, exports grew by 6.9 percent to 595 billion euros, driven by strong demand for German-made goods in European partner countries such as Spain, Portugal, Italy and France, but also in the United States, BGA said.

The federation attributed the buoyancy of German exports to the low price of oil and the weak euro, as well as the European Central Bank's low interest-rate policy.

Nevertheless, Boerner said the economic slowdown in China was "a source of concern" for German exporters, even if it represented a "natural process of maturing of the Chinese economy."

"But if China were to export its own problems, the German economy would not escape unscathed," he added.

"We must face up to the fact that global growth is slowing," Boerner said.

The European Union, which accounts for more than half of German exports, was also a matter of concern in view of the current massive influx of refugees and the fact that the region's debt crisis remained unresolved, he argued.

And the situation in Russia was "distastrous," the BGA said.

"It will take decades for confidence in Russia to be restored and a solution to the conflict is nowhere in sight," Boerner said.

By contrast, the Volkswagen scandal would not cause any lasting damage for the German economy, he insisted.

"Luckily, the German economy does not solely comprise a single major automobile maker, but a lot of companies that are primarily mid-sized enterprises. 'Made in Germany' is the sum of a lot of different products and services," Boerner said.

maj-spm/boc

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