Germany on the brink of recession: How will the economy be saved? | Counting the Cost Description video: Germany is Europe’s engine of growth. Berlin has also been running budget surpluses over the last five years.\n\nBut right now, Germany’s economy […]
Germany on the brink of recession: How will the economy be saved? | Counting the Cost
Germany is Europe’s engine of growth. Berlin has also been running budget surpluses over the last five years.\n\nBut right now, Germany’s economy is sputtering and could slip into recession. The country has enough headroom to stimulate the economy, though Chancellor Angela Merkel is not willing to travel down that road.\n\nBerlin finds itself caught in the middle of US President Donald Trump’s trade war with China, that is hurting global growth and as one of the world’s leading exporters it is one trap it cannot escape.\n\nThat has tipped German industry, which accounts for a fifth of its economy, into recession but unemployment is holding up at almost record levels. That is just one positive for the economy.\n\n\”I think a country like Germany could afford having a larger public debt and also there are major investment needs,\” Zsolt Darvas, a senior fellow at Brussels-based think-tank Bruegel tells Al Jazeera.\n\nHe argues that a much more forceful investment programme needs to be implemented in Germany.\n\nWill 5G technology lead to more cyberattacks?\nAs we move towards 5G mobile technology, there are growing concerns that with more devices connected to the internet, cyberattacks could increase.\n\nAnd nothing exists in isolation, the world leader in 5G technology is China’s Huawei, which is at the centre of a trade war.\n\nThe US believes Huawei’s 5G technology could be used by China to spy on other nations and sensitive industries.\n\nProtecting our ability to surf the net and use our mobile phones and apps is a $100bn-a-year industry.\n\nIt is startling that 88 percent of businesses have experienced cyberattacks in the last year. And alarmingly, one in three has been breached more than three times in the last year, according to research by cybersecurity company Carbon Black.\n\nWith the trade war, a global economic slowdown and a president facing impeachment, Patrick Morley, chief executive of Carbon Black, points out that uncertainty causes concern across global markets.\n\n\”For business leaders around the world, you have to ask yourself what the potential impacts are to you and to your company.\”\n\n- Subscribe to our channel: http://aje.io/AJSubscribe \n- Follow us on Twitter: https://twitter.com/AJEnglish \n- Find us on Facebook: https://www.facebook.com/aljazeera \n- Check our website: https://www.aljazeera.com/
Germany is on the brink of recession
Germany narrowly escaped a tech recession after the latest figures showed the country’s economy grew 0.1% in the third quarter.
German GDP growth rate exceeded analysts’ expected 0.1% contraction. On an annualized basis, the economy grew 0.5% from July to September. Increases in the second quarter were revised from – 0.1% to – 0.2%. Thus, two consecutive periods of negative growth would officially mark a recession..
«There is no recession, but the economy is certainly very weak at the moment», – said economist Klaus Wistesen.
«Today’s numbers confirm that the German economy is at a standstill, but the headlines are probably not bad enough to trigger an immediate and aggressive financial response from Berlin.», – he added.
Meanwhile, German Economy Minister Peter Altmeier said that while the numbers show the country is moving away from the threat of a technical recession in the third quarter, economic development in the region is still fragile..
Speaking on CNBC on Thursday Annette Weisbach, Daniela Schwarzer, director of the German Council on Foreign Relations, noted that the difference between a 0.1% increase and a 0.1% decline is not at all small..
«The truth is that Germany currently has no robust growth prospects», – she said, noting that the export-dependent country is suffering from changes in international trade policy.
Germany’s leading economic research institute slashed its forecasts last month Europe’s largest economy. Ifo Institute’s joint economic forecast for the whole of 2019, published in early October, has been revised down from 0.8% of GDP forecast in spring to just 0.5%.
According to the institute, the reasons for the low productivity are due to the fall in global demand for high-value goods, which hit the export-dependent German economy, along with political uncertainty and structural changes in the automotive industry..