By Christopher Weckwerth, dpa

German Chancellor Olaf Scholz said he expects closer economic ties with Indonesia while speaking at the Hannover Messe international trade fair on Monday.

“Indonesia and Germany are close partners and have the same values,” Scholz said during the first day of the event.

The night before, at an official opening ceremony for the fair, Scholz said he was committed to ensuring that a long-discussed free trade agreement between Indonesia and the European Union soon takes shape.

Indonesia is exhibiting as the partner country at this year’s Hannover Messe, the world’s leading industrial showcase.

Scholz said that the south-east Asian country experiencing an economic boom in several areas, including digital technology. The country is also investing in preparing for a transition to cleaner renewable energy, Scholz noted.

Indonesia‘s President Joko Widodo has called for the restructuring of industry “for a better world” to be accelerated.

Also on the full day of the trade fair on Monday, the leader of Germany’s biggest industrial trade group warned that the country’s exports will likely lag behind global rivals during the coming year.

“We are losing world market share again, Germany’s competitiveness is dwindling,” said Siegfried Russwurm, the president of the Federation of German Industries (BDI).

The most recent BDI forecast for 2023 predicts that German exports will grow by 2% while global trade will increase by 2.5%.

Russwurm said that exports will likely continue recovering after the Covid-19 pandemic as supply chain issues ease. But he argued that the German government should do more to ensure the country’s economic position does not deteriorate.

Germany has long been among the world’s leading exporters and many businesses in the country are oriented around foreign markets.

“We need a reduction in bureaucracy, noticeable tax cuts and a reliable and affordable energy supply,” Russwurm said on Monday.

He contended that “permanently excessively high electricity costs” are an especially dire threat to industry and are leading German companies to “think twice about where to invest.”

“What we are seeing is that significant investments are being made outside of Germany,” Russwurm said. “It’s not a threat, it’s a reality.”

The industrial lobby leader called talk of a potential economic boom from some German leaders “wishful thinking” given BDI forecasts that show low levels of growth in the near future.

Russwurm said he was “confident that the industrial nation of Germany” would meet the challenges of the coming years. “But the competition is fierce.”