Economy ministry foresees ‘shrinking gross domestic product, fewer jobs and higher unemployment’ if Republican candidate follows through on pledges

This article is more than 3 years old

This article is more than 3 years old

Germany’s economy ministry believes a Donald Trump presidency would severely damage the US economy, according to an internal memorandum reported by Der Spiegel magazine on Saturday.

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The ministry expects “shrinking gross domestic product, fewer jobs and higher unemployment” in the US if the Republican candidate were to implement his campaign pledges, the magazine cited the memo as saying.

Trump has proposed tax cuts worth $4.4tn and wants to curb government regulation and take a tougher stance on negotiating trade deals.

He says his economic plan would produce annual economic growth of 3.5% and create 25m jobs over a decade. But some economists have questioned the assumptions underpinning the plan.

Trump’s pledges are “not feasible”, Spiegel cited the memorandum as saying. Moreover, the plans would violate international or US law and could be “no basis for a realistic economic policy”.

A spokeswoman for the German economy ministry declined to comment on the Spiegel report.

Last month, the economic research firm Oxford Economics projected the US economy could be $1tn smaller than otherwise expected in 2021 if Trump becomes president.

In Mexico, meanwhile, the chief of the country’s central bank said on Friday that a Trump presidency would hit Mexico like a hurricane.

Speaking on local radio, Agustin Carstens also said that “it was a reality” that there was a correlation between the country’s weakening currency and the Trump campaign. The Mexican peso has fallen about 11% against the dollar this year.

Asked whether the Republican nominee’s victory would be like a category five storm for the country, Carstens said: “Yes, it would be a stronger hurricane.”