Brexit worries, US retail sales slide, like a bad Valentine’s
Day date, the February 14, 2019 stock market rally has fizzled out after a
perky start and Germany narrowly avoids recession, is this 2019’s economic
cautionary tale?
By: Ringo Bones
The German economy narrowly avoiding recession in 2019
should serve as 2019’s biggest economic cautionary tale because the German
economic slowdown is largely caused by President Trump’s ill advised imposition
of steep tariffs on German cars exported to the US. Anti globalist
Euro-skeptics may cry out that Germany is the only main beneficiary of the
European single-currency since its implementation, but Germany catching the
economic equivalent of the common cold could have wider implications on the
global economy this year.
Germany’s economy just about avoided falling into recession
during the final three months of 2018. Europe’s largest economy registered zero
growth during the fourth-quarter of 2018, the country’s Federal Statistics
Office said. This means it avoided two consecutive quarters of contraction,
which is the usual definition of a recession. A weak trade performance dragged
on the economy and consumer spending remained subdued. The zero growth recorded
in October to December 2018 followed a 0.2-percent contraction in the previous
quarter. Reasons for slower growth last year include a slowdown in global
economy and a weaker car sector, with German consumers less willing to buy new
cars amid confusion over new emission standards.
Despite of a worrying situation, the jobs situation in
Germany is particularly pretty good. Unemployment is among the lowest in the
world at just above 3-percent. Sadly, a strong economic rebound for Germany for
the whole of 2019 is very unlikely citing this year’s early results.
