Brexit and trade 'war' hurt German economy – The Economic Journal


Data on industrial production and exports could dent the German economy, the result of the US-China trade 'war' and a Brexit that seems to be heading for an unmarked exit from the UK from the European Union.

Next Wednesday, with the release of the German GDP growth rate for the second quarter of the year, should come the confirmation of the worst forecasts for what is the largest economy in the European Union. Note that all forecasts point to negative values.

Key indicators released in recent weeks point in the same direction, thus reinforcing the main stumbling blocks that the largest EU economy may face in the coming months.

Last Friday, the German statistics office (Destatis) reported that German exports fell about 8% in June from a year earlier, the biggest drop in three years.

Even so, overseas sales in the first half of the year showed some robustness. The German economy registered a trade surplus of 109.9 billion euros in the second quarter but this represents a 10% drop compared to the same period of 2018.

As for the industrial production data in June, which were published last week, it can be seen that the contraction compared to the same period last year was 5.2%, the largest of the decade. It should be noted that industrial production is a key sector for the German economy as it is worth 20% of German GDP.



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