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)
- Okuomose, Otuadinma win at Best of the Best Taekwondo Championship
- Arsenal’s Tierney to undergo shoulder surgery, out for 3 months
- Club World Cup: Monterrey to face Liverpool after beating Al Sadd
- Runsewe commends NCAA over initial suspension of Turkish Airline
- FRSC Edo Sector gets new Commander
- Group tasks leaders, Nigerians on time consciousness
- Cries about negative impact of border closure sponsored-Sen. Adamu
- Bankers committee earmarks N20bn to maintain national theatre
- Institute calls on govts. to allow INEC conduct local govt. elections
- Kwara Deputy Gov urges OGS old students to give back to Alma Mater
- Presidential aide criticises work done on Calabar-Itu highway by contractor
- Armed Forces College graduates 176 junior officers
- Osinbajo tasks clergy on writing to provide guidance, direction
- Why CBN must transfer Anchor Borrowers Programme to Agric Ministry – Sen. Adamu
- La Liga: Leaders FC Barcelona stumble to draw at Real Sociedad
- Sun Publishing Limited wants Justice Minister’s intervention as EFCC threatens to seal headquarters
- APC remains strong, intact in Zamfara — Yari
- Bournemouth stun Chelsea 1-0 away to end losing streak
- Group advocates women empowerment to check gender-based violence
- Lawmaker condoles with Mimiko, says mother death, great loss to Ondo
- 2 NGOs collaborate to clean up Lagos for healthy environment
- Buhari tasks universities on IGR for sustainable education
- Arts, cultural exchange strengthen relationships between countries – Emirati Artist
- Ismael, Akuso win maiden Ikogosi-Ekiti 10-km race
- CITN confers fellowship on 329, calls for professionalism
- NANS commends Gov. Oyetola for tackling youth unemployment in Osun
- Gov. AbdulRazaq reiterates commitment to Kwara’s socio-economic growth
- Bayern Munich batter Werder Bremen as Borussia Dortmund dominate Mainz
- Akeredolu condoles with Mimiko over mother’s death
- Ogun lawmaker donates equipment to health facilities in constituency
- Inclusive education: Stakeholders urge training of more special teachers
- Ethiopian Airlines to launch 3 weekly flights to Houston Monday
- Shareholders seek more mergers, acquisitions in cement industry
- Golf: U.S. fight back to leave Presidents Cup in the balance
- Salah scores twice as Liverpool sink struggling Watford
- Yuletide: Enugu FRSC seeks collaboration with state traffic agency
- Eko Disco records highest remittance efficiency in Q2, says NERC
- Doctors map out measures to forestall litigations over management of patients’ ailments
- Osinbajo in Ikenne, celebrates Otunba Adesina at 80
- Group wants Nigerians to imbibe waste management culture, recycling
- FG pledges to enhance operations of River Basin Development Authorities in 2020
- Soldiers clean up Ojuelegba axis of Lagos to enhance civilian/military relations
- Enugu hospital turns to pilgrimage ground as residents catch glimpse of quadruplets
- Poor Salary: Kaduna joint tertiary institution unions shelve planned strike
- NIMASA chief urges regular exercise to stay healthy, enhance productivity
- Expert urges Nigerians to imbibe savings culture
- Navy employs weight control mechanism to promote fitness
- Exhibit more political will in tackling nation’s security challenges, Cleric advises FG
- Gospel singer charges youths to start small, be humble
- Yuletide: Curfew, ban of fireworks still effective in Borno -Police