German economic growth slowest in six years
Economic powerhouse of EU struggles with Brexit and trade war
Germany’s economy grew by its slowest rate in six years in 2019, as the economic powerhouse attempted to withstand the effects of the US-China trade war.
The German Federal Statistics Office’s preliminary estimates found that the German economy grew by 0.6 per cent last year, a 0.9 per cent drop off from 2018. This was largely in line with analyst predictions.
In relative terms German policymakers and investors will not complain too greatly with this stuttering growth. By Autumn even the Bundesbank was bracing for a potential recession.
Indeed, Albert Braakmann, a senior statistics official recognised that: “This means that the German economy grew the tenth year in a row. This is the longest period since German reunification.”
The uncertainty caused by Brexit and the prolonged trade war between the United States and China weighed heavily on Germany’s export-dependent economy. With non-domestic orders falling repeatedly. Export growth fell by 1.2 per cent year-on-year to stand at 0.9 per cent in 2019.
According to Brakmann, this pressure was withstood thanks to a boom in the construction sector, consistently strong consumer spending and increased state expenditure.
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The resolution of Brexit and the signing of an initial ‘phase-one’ trade agreement between the world’s two largest economies at the White House today, are expected to relieve the German economy.
However, concerns still remain as to the state of Germany’s manufacturing sector, in particular the auto industry. The likes of Volkswagen and Audi have struggled to shake off the ‘Dieselgate’ emissions scandal of recent years. While the sector as a whole is playing catch up in the rush for electric vehicles.
Total manufacturing output fell by 3.6 per cent in 2019, with car production falling 11.4 per cent year-on-year from January to November.
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