Posted on Aug 26, 2019
German business optimism has deteriorated more than expected in August to hit its lowest in nearly seven years, a survey showed on Monday, in a further sign that escalating trade disputes are pushing Europe’s largest economy towards a recession, Reuters reports.
The country’s manufacturers - whose exports have been a bedrock of German economic strength - are now struggling with weaker foreign demand, tariff disputes sparked by U.S. President Donald Trump’s ‘America First’ policies and business uncertainty linked to Britain’s decision to leave the European Union.
“German companies have to buckle up in the coming quarters. As bitter as it sounds, the export dependence of the German economy is currently becoming a boomerang,” said VP Bank analyst Thomas Gitzel.
The automobile sector, a vital driver of growth in the German economy, is having trouble adjusting to stricter regulation following an emission cheating scandal and managing a broader shift away from combustion engines towards electric cars.
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