A sharp slump in exports could tip Germany back into recession – underlining its status as the ‘sick man of Europe’.
In a bleak report yesterday, the federal statistics office said exports fell 0.9 per cent in July as global demand continued to falter.
The figures underlined the crisis facing the German economy, which has for decades been powered by sales of its goods to countries around the world.
Slump: Shipping containers awaiting transit at Hamburg Port, Germany. Germany’s federal statistics office said exports fell 0.9% in July as global demand continued to falter
‘Trade is no longer the strong resilient growth driver of the German economy that it used to be, but rather a drag,’ said Carsten Brzeski, global head of macroeconomics at ING.
‘Supply chain frictions, a more fragmented global economy and China increasingly being able to produce goods it previously bought from Germany, are all factors weighing on the German export sector.’
German output declined in the final three months of last year and the first three months of this year – meaning it was in recession.
The economy stagnated in the second quarter but fears are mounting it will decline again in the current third quarter – leaving the country on the brink of another recession.
The International Monetary Fund believes it will be the only member of the Group of Seven advanced nations to shrink in 2023.
