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Germany-economy: end of the "golden decade"?

2019-08-14T11:52:11.070Z

An analyst talks about the "end of the golden decade". The German economy slowed and the second quarter was marked by a small but symbolic decline in gross domestic product down 0.1%. Indices are generally less ...



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Containers on the port of Hamburg, Germany. The decline in exports, the foundation of the German economy, explains the current slump. Getty Images / Jorg Greuel

An analyst talks about the " end of the golden decade ". The German economy slowed and the second quarter was marked by a small but symbolic decline in gross domestic product down 0.1%. The indices are generally less favorable and a decline in exports largely explains the weakness of the German economy. This deterioration gives rise to debates about the need or not to support the economic situation, if necessary by agreeing to resort to the debt.

With our correspondent in Berlin, Pascal Thibaut

This is a " warning signal ": for the Minister of the Economy, a possible recession, a decline in gross domestic product for two consecutive quarters can and should be avoided. Peter Altmaier wants tax breaks for businesses and individuals alike. Angela Merkel, she sees things more serenely. The Chancellor said yesterday, Tuesday August 13, that it did not consider desirable a cyclical recovery plan financed by the debt.

A questioning of the sacrosanct balanced budget?

But the debates risk redoubling. Conservative economists now estimate that Germany is investing insufficiently and that current interest rates allow for little risk of doing more. The Federation of German Industry also calls for a challenge to the sacrosanct fiscal balance to boost the economy while Germany has deepened its public finances in recent years. A view shared by leftist parties.

Individuals consume more

In fact, domestic demand is - for the time being - the most stable pillar of the German economy. Individuals, thanks to unemployment at the lowest and rising wages consume more. The decline in exports, the foundation of the German economy, explains the current slump when trade disputes, protectionist measures of the United States and the risks of Brexit harm the made in Germany . The German government is no longer planning for this year on a modest growth of 0.5%. It could return in 2020 to its level of 2018, 1.5%.

Source: rfi

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