FRANKFURT – In significant signs of the damage being caused by the trade war between China and the US, the data released on Wednesday showed that the German economy is moving towards recession and that growth at Chinese factories is slowing down. at a pace not seen in almost two years.
The German economy departed 0.1 percent from April to June and is treading water in the past year, an official government statistics agency said. Deutsche Bank analysts predicted that the economy would continue to decline in the current quarter, meeting the technical definition of recession.
In China, the factory output fell in July to slow in 17 years, according to government data. While the Chinese economy contributed trade figures were stronger than expected last week, another sign of industrial output figure was that China's overall growth rate continues to ease under the weight of Beijing's trading war with the United States. and the country's debt problems.
It is not surprising that China and Germany are falling under the weight of trade pressures. China is the world's largest exporter of goods and services, just in front of the United States, and Germany is the only place. 3. Countries are directly hit by President Trump's tariffs, and overall, the conflict has caused trade into the global economy.
However, the new data helped to reduce stock prices down across Europe. The main stock indexes in Frankfurt, Paris and London were down 1 per cent or more in noon trade.
In the US, the S&P 500 fell more than 1.5 percent in early trade. Results on US government bonds also fell, indicating that investors were reducing their growth prospects. The bond yields, which will fall as prices rise, are falling as the recent conflict pushed investors seeking safe asylum towards government bonds.
The troubles in Germany and China are negative for the rest of the world, due to the external roles played by global commerce countries.
Automobiles, Germany's largest export product, is a prime example of collateral damage being carried out by the wider trading war. German carmakers Volkswagen, Daimler and BMW earn at least one third of their income in China, where car sales are falling after years of explosive growth. One factor in the slide is the threat to trade threats that Chinese consumers have ignored, preventing them from purchasing large ticket goods.
German economic performance was the the second quarter of any eurozone country shows particular data from the European Union statistical agency.
This is a disgrace to Germany, which has lectured on other countries on how to manage their economies. The sharp growth of Chancellor Angela Merkel's government is likely to increase spending to stimulate the economy.
“Today's G.D.P. The report certainly says the end of a golden decade for the German economy, ”said Carsten Brzeski, chief economist at German ING, in a note to clients. “The pressure on the German government will increase.”