Germany still looks like the ‘sick man of Europe’ as drop in exports fuels recession fears
Germany still looks like the ‘sick man of Europe’ as drop in exports fuels recession fears
A sharp drop in exports could send Germany back into recession, underlining its status as the ‘sick man of Europe’.
In a gloomy report yesterday, the federal statistics office said exports fell 0.9 percent in July as global demand continued to falter.
The numbers underscored the crisis facing the German economy, which has been driven for decades by selling its goods to countries around the world.
Breakdown: Shipping containers await transit at the Port of Hamburg, Germany. Germany’s Federal Statistical Office said exports fell 0.9% in July as global demand continued to falter
“Trade is no longer the strong, resilient growth engine of the German economy that it used to be, but rather a hindrance,” said Carsten Brzeski, global head of macroeconomics at ING.
“Supply chain friction, a more fragmented global economy and China’s ability to produce more and more of the goods it previously bought from Germany are all factors weighing on Germany’s export sector.”
German production fell in the last three months of last year and the first three months of this year – meaning it was in recession.
The economy stagnated in the second quarter, but fears are growing that it will slow down again in the current third quarter, putting the country on the brink of another recession.
The International Monetary Fund believes it will be the only member of the Group of Seven Advanced Countries to shrink in 2023.