Blow for Merkel as Germany falls into recession
GERMANY has tumbled into recession, the country’s central bank have confirmed.
In a major blow to chancellor Angela Merkel, the Bundesbank said the German economy shrank again in the third quarter of the year.
It followed an output decline of 0.1 per cent in the second quarter, leaving the eurozone’s largest economy officially in recession.
Global trade tensions, a downturn in the German car industry and business uncertainty over Brexit are being blamed.
The Bundesbank monthly report said: “The decisive factor here is the continued downturn in the export-oriented industry.”
Car production was “greatly reduced” in July and August, the report said, adding that tough emission standards introduced in September may have affected the industry. Production of consumer goods “fell sharply”, while capital goods production stagnated.
However experts expect the UK to avoid recession. While the British economy shrank by 0.2 per cent in the second quarter of this year, City forecasts suggest it will return to growth in the third quarter.
The International Monetary Fund has warned of a “synchronised slowdown” around the world. It has cut its global growth forecast for this year to three per cent, down from 3.6 per cent last year and the weakest since the financial crisis a decade ago.
Despite warnings over the impact of Brexit, Britain is expected to grow faster than Germany, France and Italy in 2019 and 2020.