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German economy stagnates with no growth in last quarter - business live German economy stagnates with no growth in last quarter - business live
(32 minutes later)
Rolling coverage of the latest economic and financial news, including the latest eurozone growth figuresRolling coverage of the latest economic and financial news, including the latest eurozone growth figures
The euro has dropped to its lowest level in over two and a half years, after this morning’s German GDP figures.
The single currency has dipped to €1.0828, its weakest levels since May 2017, extending its recent losses.
The risk of a full-blown recession is hanging over Germany, says economist Carsten Brzeski of ING.
He fears that the Covid-19 outbreak will hurt Germany, although a pick-up in construction could cushion the blow.
Having analysed today’s GDP report, Brzeski writes:
Brzeski reckons that hopes of a strong rebound this year have been wiped out:
Stagnation is bad, but there’s some relief that Germany didn’t do even worse.Stagnation is bad, but there’s some relief that Germany didn’t do even worse.
Oliver Rakau of Oxford Economics feared German GDP could actually have contracted in the last quarter, given recent weak data:Oliver Rakau of Oxford Economics feared German GDP could actually have contracted in the last quarter, given recent weak data:
Bloomberg’s Fergal O’Brien agrees:Bloomberg’s Fergal O’Brien agrees:
But currency analyst Marc-André Fongern is concerned about Germany’s prospects this year, given the coronavirus outbreak will hurt its manufacturing base.But currency analyst Marc-André Fongern is concerned about Germany’s prospects this year, given the coronavirus outbreak will hurt its manufacturing base.
2019 was not a great year for Germany.2019 was not a great year for Germany.
Today’s GDP report shows that the economy grew by 0.5% in January-March, only to shrink by 0.2% in April-June. Growth picked up by 0.2% in July-September, before fizzling out in the last quarter.Today’s GDP report shows that the economy grew by 0.5% in January-March, only to shrink by 0.2% in April-June. Growth picked up by 0.2% in July-September, before fizzling out in the last quarter.
Good morning, and welcome to our rolling coverage of the world economy, the financial market, the eurozone and business.Good morning, and welcome to our rolling coverage of the world economy, the financial market, the eurozone and business.
Newsflash: Germany’s economy is flatlining, as a slowdown in spending and exports wipes out growth.Newsflash: Germany’s economy is flatlining, as a slowdown in spending and exports wipes out growth.
Figures just released show that German GDP was unchanged in the fourth quarter of 2019. Economists had expected a rise of 0.1%, so this is disappointing (and matches the UK’s own performance in Q4).Figures just released show that German GDP was unchanged in the fourth quarter of 2019. Economists had expected a rise of 0.1%, so this is disappointing (and matches the UK’s own performance in Q4).
On an annual basis, the German economy only grew by 0.6% during 2019, Destatis adds. That’s a very weak result, as Europe’s largest economy struggles to handle trade tensions, changes in the auto industry, and a slowing European economy.On an annual basis, the German economy only grew by 0.6% during 2019, Destatis adds. That’s a very weak result, as Europe’s largest economy struggles to handle trade tensions, changes in the auto industry, and a slowing European economy.
It’s not all gloom -- growth in the third quarter has been revised up to 0.2%. But the general picture is weak:It’s not all gloom -- growth in the third quarter has been revised up to 0.2%. But the general picture is weak:
Destatis, Germany’s statistics body, reports that household and government spending both slowed in the last quarter, while investment from companies was mixed.Destatis, Germany’s statistics body, reports that household and government spending both slowed in the last quarter, while investment from companies was mixed.
Donald Trump’s trade wars also hurt Germany. Destatis reports that German exports were “slightly down” in the last quarter, while imports of goods and services increased.Donald Trump’s trade wars also hurt Germany. Destatis reports that German exports were “slightly down” in the last quarter, while imports of goods and services increased.
Later today we’ll get an updated reading on eurozone GDP for the last quarter. Preliminary figures release last month showed that the region only grew by 0.1%, with France and Italy shrinking.Later today we’ll get an updated reading on eurozone GDP for the last quarter. Preliminary figures release last month showed that the region only grew by 0.1%, with France and Italy shrinking.
More to follow!More to follow!
The agendaThe agenda
7am GMT: German GDP for October-December 2019, first estimate7am GMT: German GDP for October-December 2019, first estimate
10am GMT: Eurozone GDP for October-December 2019, second estimate10am GMT: Eurozone GDP for October-December 2019, second estimate