FOREX TradingCharts.com

Financial News: German Economy Shrinks In Q2 On Exports

German Economy Shrinks In Q2 On Exports

08/27/2019 - 05:12:00 (RTTNews)

(RTTNews) - Germany's economy contracted as initially estimated in the second quarter due to weak foreign demand, and there are signs that the shrinking continued into the third quarter, pushing the biggest euro area economy to the verge of recession and strengthening calls for economic stimulus.

Gross domestic product shrank slightly by 0.1 percent quarter-on-quarter in the three months to June, reversing the first quarter's 0.4 percent expansion, detailed results from Destatis revealed Tuesday. This was the first fall in three quarters and matched the initial estimate.

After calendar adjustments, GDP gained 0.4 percent year-on-year, which was slower than the 0.9 percent growth registered in the first quarter. At the same time, the unadjusted GDP remained flat. Both the annual growth figures were left unrevised.

The expenditure-side breakdown of GDP showed that foreign trade was the only component dragging the economy. Household consumption gained 0.1 percent from the first quarter and government spending grew 0.5 percent.

Fixed capital formation in machinery and equipment climbed 0.6 percent and in other fixed assets by 1.0 percent on the preceding quarter. Only gross fixed capital formation in construction decreased, down by 1.0 percent, which was probably because of the mild weather at the beginning of the year.

Meanwhile, exports decreased 1.3 percent on the quarter, which was markedly more than the 0.3 percent drop in imports.

In the August monthly report, Bundesbank said the largest euro area economy could shrink again in the third quarter as the slowdown in the industry continues.

Although the second glance of GDP data has some bright spots, the short-term outlook for the German economy remains bleak, Carsten Brzeski, an ING economist noted.

Nonetheless, Brzeski said after ten years of strong economic growth, stagnation or even a technical recession at this juncture is not yet a reason to panic.

Another report from Destatis revealed that the net lending of general government totaled around EUR 45.3 billion in the first half of the year. As a percentage of GDP, there was a surplus ratio of 2.7 percent.

Since the global economy is unlikely to recover quickly, the pressure for an economic stimulus package is likely to increase further in months ahead, Ralph Solveen, an analyst at Commerzbank, said.

The limited scope for an economic stimulus package may also be one of the reasons why the German Federal Government has so far shown itself to be largely immune to such demands from abroad, Solveen noted.

For comments and feedback: contact editorial@rttnews.com

Copyright(c) 2019 RTTNews.com. All Rights Reserved

Market News provided by RTTNews

RECENT INTERNATIONAL FINANCIAL NEWS


Rosengren Warns Of Risks Of Further Monetary Policy Accommodation (35 min(s), 43 sec(s) ago)
(RTTNews) - With U.S. economic growth continuing at a solid rate despite the U.S.-China trade war, ...Full Story»

Bullard Explains Preference For Bigger Interest Rate Cut (01 hr(s), 21 min(s), 17 sec(s) ago)
(RTTNews) - St. Louis Federal Reserve President James Bullard was one of three voting members of t ...Full Story»

Eurozone Consumer Confidence At 4-month High (01 hr(s), 56 min(s), 17 sec(s) ago)
(RTTNews) - Eurozone consumer confidence improved in September to its highest level in four months ...Full Story»

Belgium Consumer Confidence Weakens For Second Month (02 hr(s), 49 min(s), 17 sec(s) ago)
(RTTNews) - Belgium's consumer confidence weakened for a second straight month in September, s ...Full Story»

India Cuts Corporate Tax Rates To Boost Growth (03 hr(s), 47 min(s), 17 sec(s) ago)
(RTTNews) - India's government on Friday announced a reduction in the corporate tax rate to bo ...Full Story»

Finland Current Account Logs Deficit In Q2 (03 hr(s), 57 min(s), 17 sec(s) ago)
(RTTNews) - Finland's current account logged a deficit in the second quarter, Statistics Finla ...Full Story»

Ireland Wholesale Price Decline Slows In August (04 hr(s), 30 min(s), 17 sec(s) ago)
(RTTNews) - Ireland's wholesale prices fell at a slower rate in August, data from the Central ...Full Story»

Slovenia Output Price Inflation Steady In August (04 hr(s), 32 min(s), 17 sec(s) ago)
(RTTNews) - Slovenia's output price inflation stable in August, figures from the Statistical O ...Full Story»

Search

INTERNATIONAL FINANCIAL NEWS

Rosengren Warns Of Risks Of Further Monetary Policy Accommodation

09/20/2019 - 13:45 PM (RTTNews)
(RTTNews) - With U.S. economic growth continuing at a solid rate despite the U.S.-China trade war, ...Full Story>>

Bullard Explains Preference For Bigger Interest Rate Cut

09/20/2019 - 10:48 AM (RTTNews)
(RTTNews) - St. Louis Federal Reserve President James Bullard was one of three voting members of t ...Full Story>>

Eurozone Consumer Confidence At 4-month High

09/20/2019 - 10:13 AM (RTTNews)
(RTTNews) - Eurozone consumer confidence improved in September to its highest level in four months ...Full Story>>

Belgium Consumer Confidence Weakens For Second Month

09/20/2019 - 09:20 AM (RTTNews)
(RTTNews) - Belgium's consumer confidence weakened for a second straight month in September, s ...Full Story>>

India Cuts Corporate Tax Rates To Boost Growth

09/20/2019 - 08:22 AM (RTTNews)
(RTTNews) - India's government on Friday announced a reduction in the corporate tax rate to bo ...Full Story>>
Copyright © 2019. All market data is provided by Barchart Solutions. Information is provided "as is" and solely for informational purposes, not for trading purposes or advice. To see all exchange delays and terms of use, please see disclaimer.