Recession Fears Grow As German Economy ‘Could Face The Perfect Storm’
Data released on Friday showed that German industrial production fell for the fifth time in the last seven months.
According to the OECD, the German economy is expected to grow 0.4% in 2020 and 0.9% in 2021.
Data released on Friday showed that German industrial production fell for the fifth time in the last seven months, dropping by almost 7% on the year.
Exports have also barely grown in the month of December, up by just 0.1% month-on-month. The recent figures add to the ongoing pressure facing Europe’s largest economy.
Yesterday, official figures showed German factory orders contracted 2.1% month-on-month.
“I am pessimistic about the German outlook because Germany could experience something like the perfect storm,” Marcel Fratzscher, President of the DIW (German Institute for Economic Research) said on Friday.
He said that there are “so many risks,” such as global trade slowdown, the coronavirus, geopolitical conflicts, a weak financial sector in Europe and Brexit, that the German government must take immediate action.
In a research note, Carsten Brzeski, chief economist at ING Germany, said that Friday’s data “has raised the risk that next week’s GDP (gross domestic product) data could bring back the R-word for the German economy.”