International trade conflicts and the cooling of the global economy are having an impact on the export-oriented German economy. The gross domestic product (GDP) shrank by 0.1 percent compared to the previous quarter, as the Federal Statistical Office announced on the basis of preliminary data. At the beginning of the year, economic output had grown by 0.4 percent.
The development was reportedly slowed down by foreign trade. Exports of goods and services fell more sharply than imports compared to the previous quarter. Private consumption rose, companies invested more. However, construction spending declined following a strong increase at the beginning of the year due to the comparatively mild winter.
Above all, the joy of shopping of consumers supports Europe's largest economy. People are in a consumer mood in the face of low unemployment. In addition, saving throws off little because of the slump in interest rates. However, according to the GfK consumer researchers, consumers have recently become more cautious when it comes to spending money. Reports about downsizing and the introduction of short-time working made the fear of job loss grow, said GfK consumer climate expert Rolf Bürkl recently.
The slowdown in the global economy, the uncertainties over the trade conflict between the US and China and the uncertainties surrounding Brexit put pressure on German industry. Added to this is the structural change in the auto industry due to electric mobility.
"Of course, trade disputes, Brexit and the digital transformation are affecting exports, but the main reason for the impending recession is the federal government's false prioritization," said the president of the Bundesverband mittelständische Wirtschaft (BVMW), Mario Ohoven.
According to economists, the economic recovery expected for the third quarter is increasingly in question, according to data that has been rather weak. "Germany's economy is on the brink," said Sebastian Dullien, scientific director of the Institute for Macroeconomics and Economic Research of the union Hans Böckler Foundation. The chances for a rapid recovery of the economy and in particular the industry in the second half of the year had dropped significantly.
Chancellor Angela Merkel currently sees no need for economic stimulus packages. Although the economy is entering a "difficult phase", the CDU politician had said at a readers' forum of the Baltic Sea newspaper . Merkel warned against talking badly about the economic situation. "We will act according to the situation." For the full year, the Federal Government recently expected economic growth of 0.5 percent. Gross domestic product rose by a total of 1.4 percent last year.