Slumping exports sent Germany’s economy into reverse in the second quarter as its manufacturers struggle at the sharp end of a global slowdown amplified by tariff conflicts and fallout from Brexit, official data showed on Wednesday.
The Federal Statistics Office data showed in Berlin that overall output fell 0.1 per cent quarter-on-quarter.
The data also showed that on a calendar-adjusted basis, annual growth slowed to 0.4 per cent from 0.9 per cent in the first quarter and for 2019 overall Berlin expects growth to drop to just 0.5 per cent from last year’s 1.5 per cent.
The economy ministry called the outlook subdued, noting that Britain’s scheduled exit from the EU on Oct. 31 looked likely to be a disorderly one, while Economy Minister Peter Altmaier said Wednesday’s data was a wake-up call.
“We are in a phase of economic weakness but not yet in recession. We can avoid that if we take the right measures,” Altmaier told mass-market daily Bild.
His ministry said impetus was unlikely to come from the industrial sector, whose BDI association – in an unusual move -joined a growing chorus of voices urging the government to kick-start growth by ditching its balanced budget rule and finance more public investments through new debt.
With pressure growing on a thus far reluctant government to provide more fiscal stimulus, the economy minister said action was needed to prevent a second consecutive quarter of contraction that would tip the country into recession.
The global slowdown, reinforced by Chinese industrial output expanding at its lowest rates in 17 years in July, has broadly impacted the euro zone, where corresponding data showed second quarter growth halved to 0.2 per cent.
But Germany’s traditionally export-reliant economy – Europe’s largest – has been particularly vulnerable, amid signs that the boost it has received from a sustained period of surging domestic demand is waning.
“Today’s GDP report definitely marks the end of a golden decade for the German economy,” said ING analyst Carsten Brzeski.
“Trade conflicts, global uncertainty and the struggling automotive sector have finally brought (it)… down on its knee.”
A government spokeswoman said Berlin did not currently see “any need for further measures to stabilize the economy,” which was still expected to grow slightly this year.
Despite Wednesday’s headline quarterly figure matching expectations, markets also took fright, with the yield on Germany’s benchmark 10-year government bond hitting a record low of -0.624 per cent.
“The bottom line is that the German economy is teetering on the edge of recession,” Andrew Kenningham from Capital Economics said, noting that exporters were facing an even bigger potential hit if a no-deal Brexit materialized. (Reuters/NAN)
CBN injects $297.92 into secondary market
The Central Bank of Nigeria (CBN), has injected 297.92 million dollars into the retail Secondary Market Intervention Sales (SMIS).
The bank’s Director, Corporate Communications Department, Mr Isaac Okorafor made this known in a statement in Abuja on Friday.
Okarafor disclosed that CBN also injected CNY21.2million in the spot and short-tenured forwards segment of the inter-bank foreign market.
According to him, the United States dollars-denominated transactions are to meet requests in the agricultural and raw materials sectors, while those in Chinese Yuan are for Renminbi-denominated Letters of Credit.
The director reiterated that the bank’s management was satisfied with the continued stability in the foreign exchange market.
He assured that the CBN remained committed to meeting foreign exchange needs of all sectors of the economy.
Meanwhile, N358 was exchanged to a dollar, while CNY1 exchanged at N46 at the Bureau De Change (BDC) segment of the foreign exchange market on Friday.
No electricity tariff increase has been approved yet —— NERC
The Nigerian Electricity Regulatory Commission (NERC), says no tariff increase has been approved by the commission yet.
In a statement, Mr Usman Arabi, NERC’s General Manager, Public Affairs, however, in a statement on Friday in Abuja said it was still consulting with stakeholders.
He said that the commission wished to notify the public that no tariff increase had been approved by the commission contrary to the impression in some quarters.
“However, the commission in the discharge of its statutory responsibilities enshrined under the Electric Power Sector Reform (EPSR) Act, shall continue to undertake periodic reviews of electricity tariffs in accordance with prevailing tariff methodology.
`In all instances of such reviews and rule-making, the commission shall widely consult stakeholders and final decision shall be taken with due regard of all contributions,” he said. .
Arabi said that the commission wished to provide guidance that the minor review implemented by the commission was a retrospective adjustment of the tariff regime released in 2015
He said that this was to account for changes in macroeconomic indices for 2016, 2017 and 2018, “thus providing certainty about revenue shortfall that may have arisen due to the differential between tariffs approved by the regulator and actual end-user tariffs,” he said
NSE: Market indices upbeat, up by 0.62%
Trading on the Nigerian Stock Exchange (NSE), for the third consecutive days, maintained a bullish trend to close the week upbeat.
The Nigeria News Agency reports that the crucial market indices on Friday appreciated further with a growth of 0.62 per cent.
Specifically, the market capitalisation of listed equities inched N33 billion or 0.62 per cent to N13.524 trillion from N13.441 trillion achieved on Thursday.
Also, the All-Share Index rose by 170.51 points or 0.62 per cent to close at 27, 800.17 points against 27,629.66 posted on Thursday.
An analysis of the price movement table shows that Nestle led the gainers’ table, growing by N10 to close at N1, 230 per share.
Unilever followed with a gain of N2.45 to close at N29.45, Guaranty Trust Bank gained 90k to close at N27.90 per share.
Forte Oil improved by 66k to close at N16, while C & I Leasing also added 60k to close N7.30 per share.
Conversely, Dangote Cement Industry recorded the highest loss to lead the losers’ table, declining by 50k to close at N166.50 per share.
Continental Reinsurance trailed with a loss of 10k to close at N1.50, while Dangote Sugar Refinery was down by 10k to close at N1.30 per share.
Triple Gee lost 7k to close at 63k, while Unity Bank declined by 6k to close at 63k per share.
Similarly, the volume of shares traded closed higher with a total of 1.24 billion shares valued at N3.29 billion in 3,644 deals.
This was in contrast with 272.60 million shares worth N4.49 billion exchanged in 3,425 deals on Thursday.
Sovereign Trust Insurance Plc was the most active stock, trading 900.02 million shares valued at N216 million.
FBN Holding followed with an account of 80.12 million shares worth N401.08 million, while Courtville traded 55.07 million shares valued at N12.11 million.
Access Bank sold 36.42 million shares worth N236.89 million, while Transcorp exchanged 34.56 million shares valued at N36.94 million.
Edited by Olagoke Olatoye