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Slowest Economic Growth In 2018 For Germany In Five Years


01/16/2019


Slowest Economic Growth In 2018 For Germany In Five Years
The latest official figures from Germany show that its economy grew at the slowest rate in 2018 since 2013 at 1.5 per cent. There has been a sharp slowdown on the Europe's largest economy as 2018 progressed, shows figures from the Federal Statistics Office.
 
The primary headwinds causing the slowdown have been identified to be a weaker global economy and issues with the car industry because of the new stricter pollution standards.
 
While in 201, the German economy grew at 2.2 per cent and the expected growth for entire of 2018 at the start of the same year was about 1.8 per cent. Data showed that global trade disputes resulted in a third quarter growth shrinkage in Germany by 0.2 per cent.  That had raised concerns that the German economy could face another consecutive quarter of contraction or negative growth which would have flung the economy into recession. The fourth quarter figures have not yet been released by the statistics office has not released because of the absence of enough data to provide an accurate reading.
 
However, independent economists watching the German economy have initially calculated to suggest that there could have been a growth of 0.2 per cent during the last quarter of the last year.
 
Confusion among German consumers over the new emission standards resulted in their reluctance to buy new cars which resulted in a weak performance on the car industry of the country and the slowdown of the overall global economy were pinned to the major reasons for the reasons for slower growth last year.
 
Movement of some goods were held back last year because of low water levels, particularly in the Rhine, which also was one of the reasons for the slowdown.
 
Based on the unofficial data available from some economists, it is likely that Germany might have avoided a recession last year.
 
However economists also agree that the second half of 2018 was weak for the economic growth of the country. That was compounded by a general slowdown in the eurozone as whole for the third quarter of 2018 because of a contraction of two of its large economies - Germany and Italy, despite reasonably firm growth being registered by Spain and France.
 
One of the major disadvantages of the German economy is its reliance on exports which makes it vulnerable to global trading and business environment. 
 
China played an important role in the slowdown of the German economy as international commerce was hit because of a slowdown in China. Further, China is also the third largest export market of German manufacturers. The steepest fall in export orders for six years from China and a number of firms reporting lowered sale in the Chinese market emerged out of a recent survey of German manufacturers.
 
The best guess at the current moment is that a recession has been avoided by the German economy, opined Claus Vistesen, chief eurozone economist at Pantheon Macroeconomics. However it is  fact that the German economy has slowed down "thanks mainly to a slowdown in consumers' spending and exports," Vistesen added. "Looking ahead, we think consumption will pick up. Real wage growth is firm, and the recent plunge in growth of goods spending won't be sustained."
 
(Source:www.bbc.com)