Germany shrugs off recession fears by returning to growth – business live


Rolling coverage of the latest economic and financial news, including new GDP figures from Europe’s largest economy

8.10am BST

German Q1 GDP at +0.4% q/q was a touch weaker than we had penciled in, but still showed a remarkable resilience of domestic demand to the many external headwinds. 1/n pic.twitter.com/WYs4bBULO2

7.52am BST

Germany’s welcome return to growth in the last quarter suggests that any panic about the state of the eurozone’s largest economy was overdone, argues Carsten Brzeski of Dutch bank ING.

He writes:

Today’s GDP data is balm for the soul of the German economy.

It also confirms our long held view that not all is bad in the German economy. Some of last year’s one-off factors have turned around, the German automotive industry might have seen better times but should not be written off and private consumption remains solid. In fact, the ongoing dichotomy between struggling industry and strong domestic demand continues and at least this time around ended with a positive outcome.

Just as weak GDP data in the second half of 2018 was not purely a result of wrong policies and business decisions or a sign that the German economic business model should be discarded, so today’s strong data is no reason for complacency.

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