The downturn in the industry threatened to slow economic growth in Germany, writes Bloomberg with reference to one of the leading economic experts, which advises the government of Chancellor Angela Merkel.
“The production suffered greatly from the downturn in world trade – the industry is in recession,” said Volker Wieland, a member of the Council of economic experts to the German government.
“Jobs can be lost, and the downturn in the industry could lead to reductions in other sectors. The risk of a recession has increased, but our current diagnosis, we have not yet reached this state,” he added.
The Council has reduced the growth forecast for the German economy next year to 0.9%, citing a slowdown in global growth. It is expected that Europe’s largest economy will grow just 0.5% this year, but likely will avoid the “broad and deep” recession.
In March the Council predicted a growth of 1.7% in 2020 and by 0.8% in 2019.
The German economy, dependent on exports, is suffering from a slowdown in the world economy, trade tensions and uncertainty about Brexit.
German GDP in the II quarter decreased by 0.1% in quarterly terms.Prospects for the German economy remain uncertain. Most economists expect the GDP contraction in the third quarter, which would mean a technical recession.
The Federal statistical office is expected to publish the first estimate of GDP for the III quarter November 14.