Germany: Bigger problems than a short-term glitch – Nordea Markets

In view of analysts at Nordea Markets, the problems of the German car manufacturers due to difficulties with the certification of new cars hit the German economy in Q3, and the weakness has extended into the fourth quarter and seems to touch the industrial sector more broadly.

Key Quotes

“Given that the Q3 numbers were boosted by very favourable inventory accumulation and still showed a contraction, the German economy probably fell into a technical recession in the latter half of 2018.”

“The weakness in the external outlook will burden the German economy also during the first half of this year, as illustrated by the lower confidence numbers. As a result, even if we expect to see a rebound in growth in the latter half of the year, growth for 2019 as a whole will probably end up below 1%.”

“In addition to the strong labour market and rising wages, another factor supporting growth is the loosening of fiscal policy in the forecast period.”

 

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility.