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German economy returns to growth
FRANKFURT AM MAIN, May 15, 2019 (BSS/AFP) – The German economy bounced
back in the first quarter from a weak second half of 2018, official data
showed Wednesday, with gross domestic product (GDP) adding 0.4 percent
between January and March.
Europe’s powerhouse had only narrowly avoided a technical recession — two
quarters of negative growth — last year, federal statistics authority
Destatis also confirmed, shrinking 0.2 percent in the third quarter and
remaining flat in the fourth.
Over the full year in 2018, GDP expansion in Europe’s largest economy
slowed from the previous year’s 2.2 percent to 1.4 percent, and 2019 presents
new risks to growth.
Observers are concerned that Germany and the wider 19-nation eurozone
could suffer a sharp slowdown, with a resilient domestic economy and service
sector but export-oriented industries weighed down by external trade
conflicts.
Although an uneasy commercial truce for now remains in place between
Brussels and Washington, knock-on effects from President Donald Trump’s
tariff showdown with China are making themselves felt in Europe.
The federal government in Berlin has repeatedly slashed its growth
forecasts for 2019, in April predicting just 0.5 percent expansion.
Many think-tanks and organisations like the International Monetary Fund
(IMF) have also cut expectations, although they remain less cautious than the
economy ministry.
“Given the weakness of industrial performance and risks from overseas,
caution will continue to dominate” views of the German economy, analyst Jens-
Oliver Niklasch of LBBW bank commented.
“Nevertheless, the start gives hope that 2019 might not turn out as bad as
the latest forecasts,” he added.
BSS/AFP/HR/1240