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In the latest sign that the economic powerhouse of Europe is teetering on the edge of recession thanks to the trade war between the US and China, Germany's export-heavy economy shrank by 0.1% in the three months through June, according to official data published Wednesday by Destatis, the country's federal statistics office.
The disappointing economic data - the second contraction in four quarters - comes one day after the ZEW Survey of financial market experts showed that German economic sentiment in August dropped to its lowest reading since 2011, which is stoking concerns that the German economy could slide into recession during Q3.
Sector - Economy - Contraction - BBG - Jamie
The industrial sector tipped the economy into contraction in 2Q, said BBG economic Jamie Rush, and there's risk of further weakness in the second half of the year.
"If there’s any good news to take from this release, it’s that services must have continued to expand, indicating patches of resilience persist."
Economy - Minister - Peter - Altmaier - Spin
Economy Minister Peter Altmaier tried to put a positive spin on the numbers, telling Bild that Germany can avoid a recession if the government responds with the right policies. However, the Q2 data are a "a wake-up call and a warning sign," Altmaier said.
"We are in a phase of weak growth but not yet a recession," he said. "The simmering trade conflicts are taking their toll and Germany’s export-orientated manufacturing sector is particularly affected" Germany needs "intelligent policies for growth,"...
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