Germany has narrowly avoided falling into recession after the country registered zero growth during the last three months of 2018, according to official data.
There had been fears Europe’s largest economy would record two consecutive quarters of negative growth – the technical definition of a recession – after it contracted 0.2% between July and September.
Recapping 2018, federal statistics authority Destatis said the German economy had enjoyed a “first half year with plenty of momentum”, adding 0.4% in the first quarter and 0.5 in the second, before “a small trough in the second half of the year” which was prevented from turning negative thanks to construction and business spending.
The Week
Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.
Sign up for The Week's Free Newsletters
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
“Reasons for slower growth last year include a slowdown in the global economy and a weaker car sector, with German consumers less willing to buy new cars amid confusion over new emission standards,” says the BBC. “In addition, low water levels, particularly in the Rhine, affected growth by holding back movement of some goods.”
Despite the gloomy figures, ING Diba bank economist Carsten Brzeski told Deutsche Welle: “Economic fundamentals remain solid and from here on, chances of a gradual rebound are still much higher than chances of yet another disappointment.”
The Financial Times agrees, saying “while an intensification of a trade war between the US and China and the possible imposition of US tariffs on German automobiles remain a concern, most economists are confident that the country’s economy will expand in 2019 — although at a slower pace than in recent years”.
Others are not so certain.
Sky News says that Germany's export-led model “remains particularly exposed in the EU to the continued threat of a hard Brexit, which would see the UK leave the EU, its single market and the customs union”.
“Germany got away with a black eye,” DekaBank economist Andreas Scheuerle said of the fourth-quarter numbers. “But the first quarter is not looking like it is going to be easy, either, as political uncertainties are weighing heavily on corporate confidence”.
A separate estimate by Eurostat, the European Commission’s statistics bureau, showed that the eurozone expanded 0.2% in the last quarter.
Barret Kupelian, senior economist at PwC, told The Guardian “most of the slack from Germany’s and Italy’s poor performance was offset by strong output growth in Spain, the Netherlands and France which grew at a respectable 0.3% quarter-on-quarter despite the gilets jaunes protests”.
“Spain continues to be the poster-child of the peripheral economies, with its economy growing by an average of 0.7% quarter-on-quarter” he added.
-
Dinosaurs were thriving before asteroid, study findsSpeed Read The dinosaurs would not have gone extinct if not for the asteroid
-
Trump pardons crypto titan who enriched familySpeed Read Binance founder Changpeng Zhao pleaded guilty in 2023 to enabling money laundering while CEO of the cryptocurrency exchange
-
FBI nabs dozens in alleged NBA gambling ringSpeed Read Portland Trail Blazers head coach Chauncey Billups and Miami Heat guard Terry Rozier are among 34 people indicted in connection with federal gambling investigations
-
Sanae Takaichi: Japan’s Iron Lady set to be the country’s first woman prime ministerIn the Spotlight Takaichi is a member of Japan’s conservative, nationalist Liberal Democratic Party
-
Russia is ‘helping China’ prepare for an invasion of TaiwanIn the Spotlight Russia is reportedly allowing China access to military training
-
Interpol arrests hundreds in Africa-wide sextortion crackdownIN THE SPOTLIGHT A series of stings disrupts major cybercrime operations as law enforcement estimates millions in losses from schemes designed to prey on lonely users
-
China is silently expanding its influence in American citiesUnder the Radar New York City and San Francisco, among others, have reportedly been targeted
-
How China uses 'dark fleets' to circumvent trade sanctionsThe Explainer The fleets are used to smuggle goods like oil and fish
-
One year after mass protests, why are Kenyans taking to the streets again?today's big question More than 60 protesters died during demonstrations in 2024
-
What happens if tensions between India and Pakistan boil over?TODAY'S BIG QUESTION As the two nuclear-armed neighbors rattle their sabers in the wake of a terrorist attack on the contested Kashmir region, experts worry that the worst might be yet to come
-
Why Russia removed the Taliban's terrorist designationThe Explainer Russia had designated the Taliban as a terrorist group over 20 years ago
