Bloomberg | Aug 14, 2019 00:24
(Bloomberg) -- Terms of Trade is a daily newsletter that untangles a world embroiled in trade wars. Sign up here.
Chancellor Angela Merkel came back from her summer holidays a bit more pessimistic about the state of Germany’s economy and, it seemed, a bit more inclined to do something about the slowdown.
"It’s true, we’re heading into a difficult phase," Merkel said at a town hall event in the northern city of Stralsund late on Tuesday. The government will closely monitor second quarter economic development and then look at the third quarter, she said. "We will react depending on the situation."
It is the first time Merkel suggested the government may need to become more proactive in to respond to the country’s economic slowdown, saying that she didn’t see the need for a growth package "so far".
In recent weeks there have been growing calls in business and politics for the chancellor to adopt stimulus measures. Merkel’s Christian Democratic-led bloc as well as her junior coalition partner, the Social Democrats, have plummeted in opinion polls ahead of key regional elections next month.
Economic growth this year is forecast at just 0.6%, as fallout from the trade war hits Germany’s export-driven industry. Growth slowed from 2.2% in 2017 to 1.4% in 2018. Second-quarter GDP data is due tomorrow, and economists predict the economy contracted 0.1% in the three months through June.
"Domestic demand is still somewhat propping up the economy," said Merkel, reiterating that she would not seek another public office after her term ends in 2021.
Based on details from the draft 2020 budget proposal published by parliament today, the government will stick to its policy of not increasing net debt.
(Adds details and context throughout.)
Written By: Bloomberg
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.