The European Central Bank wants to change its long road of economic stimulus and quantitative easing. However, this desire can become a reality. Germany is the largest economy in Europe, and there is a growing risk of recession. This publication reports the Wall 24/7.st.
Federal statistical office of Germany reported that industrial production in November for the third month in a row marked by a decrease. Production at factories fell by 1.9% compared to October against the expected growth economists of 0.3%. Worse still, this decline in one month has led to a seasonally adjusted decline of 4.7% compared to the same month a year earlier.
Industrial new orders also fell 1% in November. Total industrial production excluding energy and construction decreased by 1.8%. The statistical office also reported the decline in production of capital goods by 1.8% and production of intermediate goods by 1%. The production of consumer goods recorded a fall of 4.1%. November also saw a decline in energy production by 3.1% and the decline in construction was 1.7%.
The decline in industrial production in November followed a decline of 0.8% in October.
The implication here is that the key industrial sector of Germany would become a drag to the economy in the fourth quarter. The annual growth rate will be published in the next week. This happened after the German economy showed a decline in the third quarter due to one-off factors that were said to have been associated with the new standards on car emissions.
Here is a possible technical recession in the classic sense of two consecutive quarters of negative economic growth. Some recession is clearly worse than the other, and the technical recession may be shorter and much less bloody than more pronounced. However, no one can predict the magnitude of the recession until she comes.
The German government lowered its growth forecast for 2018 in December to 1.5-1.6 percent. Its previous forecast annual growth was at 1.8 percent.
Just a year ago the German economy was described as one that is undergoing rapid expansion and has a positive portfolios and the positive sentiment indicators for the industrial sector. Consumer spending, as reported, was high, with consumption growth in the private sector. The Ministry also declared a high demand for workers in many sectors, maintaining employment at a record level.
In mid-2018, Eurostat said that Germany has the largest weight in the European Union at 21.3% of the total gross domestic product. Although more than one-fifth of the economy might not be the most, Germany is 50% more than the next two States. In the middle of 2018 was provided with a breakdown of Eurostat: Germany (15,2%), France (14,9%), Italy (11,2%), Spain (7.6%) and the Netherlands (4.8 per cent).
It is also worth noting the dominant position of Germany in the European Union of 11 member countries are not even 1% of the total weight of the Union. These countries are Malta, Cyprus, Estonia, Latvia, Lithuania, Slovenia, Croatia, Bulgaria, Luxembourg, Slovakia and Hungary.
The real beginning of the recession in Germany will be a bad omen for the global economy when it comes to 2019. However, this may be one of those rare occasions when a “technical recession” is not accompanied by large layoffs, credit housing and a significant reduction in the level of business.
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