Germany’s RECESSION BOMBSHELL: Fears SOAR as leading institute sounds Eurozone warning

Tuesday, April 17, 2018
By Paul Martin

GERMANY is facing a sharp slide towards recession, according to a bombshell report by one of the country’s top economic institutes. The Macroeconomic Policy Institute warns “recession probability” in Europe’s top economy has risen from 6.8 percent in March to a massive 32.4 percent between April 2018 to June 2018.

Tue, Apr 17, 2018

Recession fears have returned to the Eurozone after the leading financial authority in Düsseldorf analysed key German economic statistics and warned,“the likelihood that Germany will experience a recession in the next three months has increased significantly”.

After a solid start to the year, the most recent data points towards a fresh downturn, with Germany – the backbone of the Eurozone’s economic strength – suffering a decline in retail sales, industrial production, and construction.

Today’s report from the Macroeconomic Policy Institute clearly points to the slow slide towards recession in one of the world’s bellwether economies.

The report said: “The IMK economic indicator, which systematically evaluates the most important key figures for the economy, shows a value of the recession probability of 32.4 percent in its three-month outlook – April 2018 to June 2018 – in March 2018 it was only 6.8 percent.

“The probability of a recession – measured in terms of industrial production – is on the yellow level defined by the traffic light system, which signals increased uncertainty.”

The report claims that the marked increase in the probability of recession is due to the noticeable decline in industrial production and the further deterioration in sentiment indicators.

In Eurozone’s powerhouse economy, retail sales dropped by 0.7 percent in February, the sixth such fall over the last eight months. Industrial production is down a thick 1.6 percent (the largest monthly fall in three years). While factory orders are way below expectations after a 3.5 percent drop in January.

However, the report suggests that the slowdown has been compounded by the negative impact of the US-China trade barrier on global markets.

It said: “The volatility on the stock markets (CDAX) this month has increased the likelihood of a recession.

“The results paint a noticeably more critical picture than a month ago. The volatility of the financial markets, which has already been evident for several months, is currently accompanied by a noticeable deterioration in sentiment and subdued production.

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