What is the prospect of the German economy after it has escaped the "technical recession"?

After the contraction in the previous quarter, the German economy grew by zero in the fourth quarter of last year, and it was almost in a “technical recession” in which the economy contracted for two consecutive quarters. Analysts believe that the German economic slowdown is mainly affected by factors such as the uncertainty of global trade and the "Brexit" of the UK. At present, the German economy is unlikely to pick up in the first half of this year.

According to the latest data from the Federal Statistical Office of Germany, after the adjustment of price, season and working day, the German economy saw a quarter-on-quarter growth rate of zero in the fourth quarter of last year, while the third quarter of last year shrank by 0.2%. In the whole year of 2018, the German economy grew by 1.4%. , slightly lower than the 1.5% announced in January.

In the fourth quarter of last year, Germany's economic growth momentum mainly came from domestic, investment in enterprises such as construction and machinery and equipment increased, private consumption rose slightly, and government spending increased substantially. However, German exports continued to be “dumb” in the quarter, contributing less to economic growth.

Timo Walmershauser, director of macroeconomics at the Eifel Institute for Economic Research in Germany, said that since the second half of last year, trade frictions and the UK’s “Brexit” have caused heavy losses to German exports.

In addition to foreign trade factors, Germany's economic growth rate last year was also related to internal factors, such as the EU's implementation of new vehicle emission test new regulations impacting the automotive industry, last year's extreme dry weather caused by the decline of the Rhine capacity and the decline of chemical industry capacity.

Since the second half of last year, the economic growth momentum of Germany has been greatly weakened mainly due to the impact of the international trade environment. At the beginning of 2019, the German economy still showed no signs of recovery. The German government recently predicted that the German economy will only grow by 1% this year, far below the 1.8% forecast last fall.

German economic analyst Anna Andrade believes that the economic risks of Germany in 2019 mainly come from the outside.

Dieter Kempf, chairman of the Confederation of German Industry, said that if the trade between Europe and the United Kingdom was interrupted by the "Brexit", the German economy would be hit hard.

The early warning model of the Institute of Macroeconomic Policy of the Hans Berkler Foundation in Germany shows that the risk of economic recession in Germany has risen from 6% in October last year to 34% today.

At present, US trade policy is one of the important uncertainties facing the German and even European economies. The US Department of Commerce submitted a "232 Investigation" report on imported cars and spare parts to President Trump on the 17th. Analysts pointed out that if the United States significantly increases the import tariffs on automobiles and spare parts, it will bring huge risks to the German economy's pillar industry.

According to data from the German Automobile Industry Federation, German auto production and exports have fallen sharply in December last year, down 18% and 20% respectively.

Faced with concerns about the German economic outlook, the Deutsche Bundesbank released a monthly report on the 18th that there is data showing that the current German economic slowdown may be temporary and will rebound in the second half of this year.

The report also said that the German labor market is still healthy, strong wage growth means that private consumption will increase, and fiscal policy will also support economic growth.

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