German Economic Growth Lowest in 5 Years

European powerhouse slows down in 2018

Germany just managed to avoid a technical recession as domestic demand keeps sales up while exports continued to fall. The substantial slow in 2018 could be a factor of reduced Chinese demand on German goods as Trumps tariffs take effect.

Although the German economy grew by 1.5% in 2018, this is the weakest growth since 2013. The previous year growth was at 2.2%, a substantial drop in one year. There was continued fear of a technical recession in Germany after the industrial production figures dropped between October and November, a problem Manufacturers are facing. What does this mean for the Euro? Less demand for a major exporter in the EU means less demand for the Euro. The Euro should see depreciating values unless future data says otherwise.

Many of Germany's trading partners are starting to hit slowdowns in growth. The manufacturers in Germany are being hit by poor sales following signs of economic global slowdown and political uncertainty surrounding Brexit. The US and China trade war continues to hit German exports.

On a positive note German unemployment rate has fallen significantly, in the past years. This suggests a strong labour market which helped bring Germany sales up in the final quarter.

  • 5% Unemployment rate.

  • Lowest rate in over 25 years.

Overall, the Euro has been facing difficult issues all over the Europe. The Italy debt crisis and global slowdowns have had a heavy impact on the demand of the Euro. We should see a continuation in the dropping value of the Euro until there is political stabilisation and a trade agreement in the US and China.

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