Germany heading for RECESSION – Brexit and trade wars BLOWING HOLE in economy, experts say
GERMANY could still tumble into recession as the threat of a no-deal Brexit and trade wars smash Europe’s biggest economy, experts have warned.
By PAUL WITHERS
Express.co.uk
Sat, Mar 2, 2019
The country’s economy just escaped entering recession territory last month, with GDP growing at just zero percent following a 0.4 percent contraction in the previous three-month period. But Germany could be just weeks away from a recession-threatening double whammy as a potential no-deal Brexit and Donald Trump’s warning to hike car tariffs by up to 25 percent could send the economy tumbling. Chancellor Angela Merkel’s ministers have entered into a frantic plan to avert an economic catastrophe which could end Europe’s biggest economy’s golden growth for a decade.
A source close to the German government said Berlin is scheming to “pull something out of the hat” if the feared “double whammy should materialise”.
The senior official confided finance minister Olaf Scholz is mulling over plans to bend Germany’s strict debt rules to mitigate the worst-case scenario.
In a further damaging blow to Germany, the latest survey results from IHS Markit revealed the country’s manufacturing output slumped to a six-year low of 47.6 points.
Economic experts have warned the impending threat of a no-deal Brexit could hammer huge holes in the economy and its lucrative manufacturing sector.
Exports make up nearly half of Germany’s economic output and according to data from the Federal Statistics Office, cars are by far the country’s main export with annual sales worth £200billion.
In 2017, Germany exported almost a quarter of cars manufactured to the UK, while exposure in machinery (9.2% of all exports went to the UK in 2017), chemicals (6.1%) and pharmaceuticals (5.0%) is also significant.
The most valuable export destination for German cars in 2018 was the US, with revenues of £23.4billion.
Dr Kostas Maronitis, politics and international relations lecturer at Leeds Trinity University, believes Germany is “not out of economic danger” yet.
He told Express.co.uk: “The trade war between US and China, the slowdown of the eurozone and of the Chinese economy and the ongoing emissions scandal in the automotive industry will continue to haunt the Germany economy.
“The German economy is heavily dependent on the exports of its industrial output. The slowdown of the Eurozone’s major economies namely, France and Italy, and the ongoing trade war between US and China threaten the possibility of a growing economy.
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