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What Germany’s dismal GDP means for Europe and interest rates

New figures confirm the lackluster performance of the German economy hit by rising trade fears

Wednesday 14 August 2019 at 14:24

A robot mounts a windshield on a Mercedes Benz A Class on the assembly line at the Daimler factory in Rastatt, southwestern Germany
A robot mounts a windshield on a Mercedes Benz A Class on the assembly line at the Daimler factory in Rastatt, southwestern Germany Photo: Getty Images

Germany’s gross domestic product shrank 0.1% in the second quarter of the year, confirming the lackluster performance of the German economy hit by rising trade fears, the slowdown of Chinese imports and home-grown industrial and economic problems.

The GDP decline, expected as it was by most economists, puts Germany at risk of a technical recession this year (defined by two consecutive quarters of declining GDP) and contrasts with the overall eurozone’s 0.2% GDP growth in the three months to June.