Daily Management Review

Experts: German economy is on the verge of recession


Even zero growth in German exports is a success in the current crisis state of the world economy, experts say. Some say that Germany is on the verge between recession and stagnation.

Trine Juel
Trine Juel
Exports of goods from Germany in June 2019 fell by 8 percent compared with June last year, according to the Federal Statistical Office of Germany on Friday, August 9. According to the results of the first half of the year, exports increased only by 0.5 percent.

"According to the results of the whole year, hopes for even a small plus are melting away," said Volker Treier, Head of the foreign economic department of the Federal Association of Chambers of Commerce and Industry of Germany. At the same time, he acknowledged that even zero growth "is a success," given the crisis in the global economy.

According to experts, the state of German exports is affected by the trade war between the US and China and the prospects for Britain to leave the EU without an agreement regulating this process. So, an expert from the state German Development Bank KfW Klaus Borger believes that "in the summer of 2019 Germany is on the border between recession and stagnation."

Against the backdrop of the ongoing trade war between the United States and China, the International Monetary Fund was also forced once again to lower its forecast for global economic growth for 2019 and 2020. As follows from a review of the world economy (World Economic Outlook, WEO) published at the end of July, the IMF believes that global GDP growth in 2019 will amount to 3.2 percent. This is 0.1 percentage points less than in the similar forecast made in April 2019.

The IMF also lowered its forecast for world economic growth in 2020 by 0.1 percentage points.

source: dw.de