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Germany’s economy shrank by 0.1 per cent in the second quarter sparking fears a recession is looming.
While fears of a chaotic Brexit are helping to drag down the German economy, global trade conflicts and troubles in the auto industry have been mainly blamed for the weak performance of the largest member of the 19-country euro currency union.
Germany relies heavily on exporters that sell a disproportionate amount of goods to China and the United States.
Stagnating global auto sales have also hit the German carmakers and leaving its economy teetering on the edge of recession.
The slow-down darkened prospects for the entire eurozone, where the European Central Bank is poised to add more monetary stimulus at its next meeting.
It also raised the possibility that Germany could enter a technical recession by posting another consecutive quarter of falling output.
The state statistics agency Destatis said today that falling exports held back output compared to the first quarter, while demand from consumers and government spending at home supported the economy.
Cars for export and import stored in front of containers at the harbour in Bremerhaven, Germany. The German economy shrank by 0.1 per cent in the second quarter as global trade conflicts and troubles in the auto industry weighed on Europe’s largest economy
In comparison to the same quarter a year ago, the economy grew 0.4 per cent.
Germany’s economy is facing headwinds as its auto industry, a key employer and pillar of growth, faces challenges adjusting to tougher emissions standards in Europe and China and to technological change.
Uncertainty over the terms of Britain’s planned exit from the EU has also weighed on confidence more generally – British Prime Minister Boris Johnson has said his country will leave the EU on October 31, with or without a divorce deal to smooth the path to the new trading relationship.
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Germany’s economy in slow-down as it shrank by 0.1 per cent in second quarter Could enter recession by posting another consecutive quarter of falling output Global trade conflicts and troubles in auto industry blamed rather than Brexit Falling exports held back output compared to the first quarter, officials said Germany’s economy shrank by 0.1 per cent in the second quarter sparking fears a recession is looming.
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