Expectations plummet in Germany as in the worst of the crisis
The entry of Germany into a technical recession is almost taken for granted, in the absence of the Bundesbak announcing today the GDP data for the second quarter of the year.
- Slowdown.The Government of Sanchez denies the end of the economic cycle marked by all indicators
The entry of Germany into a technical recession is almost taken for granted , in the absence of the Bundesbak announcing today the GDP data for the second quarter of the year. All forecasts point to negative and, worse still, pessimism is imposed for the current quarter.
After the chills that produced the first-week publication of industrial production indicators, the worst since 2009, the European Economic Research Institute ZWE has poured a new jug of cold water on a juncture tied by the neck of the commercial war between USA and China and the uncertainty of Brexit.
The outlook is bleak and the barometer with which ZWE measures, month by month, the confidence of financial investors and stockbrokers has translated them into numbers with the biggest drop since 2011 : Investor confidence has fallen 19.6 points , until -44.1.
"The new escalation of tensions between the United States and China entails great risks to the global economy and if we add to that the increasingly likely exit without agreement of the United Kingdom from the EU the result is a collapse of growth, " explains the President of ZEW, Achim Wambach. Germany, an exporting nation par excellence, would thus be one of the first victims, a reading that other economists do not share in their entirety.
" In large companies the mood is bleak, " says the president of the research institute of the German economic IW, Michaek Hüther. But not only among those that trade with the United States, China or the United Kingdom, but for the euro zone in general. The confidence of German investors in the Eurozone has worsened significantly, from -20.3 points in July to -43.6 in August, according to the ZEW barometer.
The causes that have led to this situation are multiple and those responsible are not only three. Apart from a Trump in permanent attack on free trade and multilateral institutions, a Boris Johnson who threatens to forcibly break the ties of the United Kingdom with the EU, " the real problems of the German economy are brewing in Germany ", says Hüther.
He cites as an example the discussion on climate change and the increasingly radical proposals of political parties. " Panic attacks in the climate change debate create insecurity in the economy, " says Hüther, who advocates addressing the problem positively. That is, instead of taking the stick with taxes or prohibitions, the Government should show the carrot, encouraging innovation in the fight against global warming of the Earth.
He is not the only economist with that opinion. " We cannot blame Donald Trump or Brexit for our weakness because our weakness is called, among others, regulation, budgetary discipline, lack of fiscal stimulus, demography and an autumnal government," says Gabriel Felbemayr, convinced that "We (Germany ) We are the ones who make our destiny ».
"The future is bleak"
For all this, the first economy of the euro zone is approaching the entrance of a tunnel where light is not glimpsed. " The future is bleak, " anticipate the 193 investors and analysts interviewed by ZEW to develop a barometer that predicts that "exports and industrial production will continue to worsen." LBBW chief economist Uwe Burkert doesn't need to know more. The collapse of investor confidence is a "recession alarm signal."
The deterioration of confidence in the German economy is justified. Key sectors such as industry, construction and energy supply plummeted last June by 1.5% compared to May, according to data from the Ministry of Economy.
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