Germany's economy shrank in the second quarter and China reported a raft of weak data, sharpening fears over how far the spillover from the trade dispute between Washington and Beijing is damaging the prospects for global growth.
In Germany, gross domestic product contracted 0.1% in the three months to June, with economists and government leaders largely blaming the cool-down in Germany's export-driven economy on the uncertainty caused by the U.S.-China trade row and the prospect of an abrupt U.K. exit from the European Union.
Anticipation is growing that China will have to deploy additional stimulus measures to keep the economy growing by the 6-6.5% target set by China's leaders.
The latest data from Germany will likely now heap additional pressure on the European Central Bank to launch a new stimulus package at its next policy meeting on Sept. 12 to help revive confidence.
"Trade conflicts, global uncertainty and the struggling automotive sector have finally brought the German economy down on its knee. In particular, increased uncertainty, rather than direct effects from the trade conflicts, have dented sentiment and hence economic activity," said ING's chief economist for Germany, Carsten Brzeski.
Economists define a recession as two consecutive quarters of shrinking output, and attention is now focusing on just how far the trade dispute between Washington and China will go.
The uncertainty surrounding the trade conflict between the world's two largest economies appears to set to continue overshadowing whatever happens in Europe, Asia and other parts of the economy.
https://www.wsj.com/articles/german-economy-contracts-as-trade-woes-bite-11565768142?mod=hp_lead_pos2
In Germany, gross domestic product contracted 0.1% in the three months to June, with economists and government leaders largely blaming the cool-down in Germany's export-driven economy on the uncertainty caused by the U.S.-China trade row and the prospect of an abrupt U.K. exit from the European Union.
Anticipation is growing that China will have to deploy additional stimulus measures to keep the economy growing by the 6-6.5% target set by China's leaders.
The latest data from Germany will likely now heap additional pressure on the European Central Bank to launch a new stimulus package at its next policy meeting on Sept. 12 to help revive confidence.
"Trade conflicts, global uncertainty and the struggling automotive sector have finally brought the German economy down on its knee. In particular, increased uncertainty, rather than direct effects from the trade conflicts, have dented sentiment and hence economic activity," said ING's chief economist for Germany, Carsten Brzeski.
Economists define a recession as two consecutive quarters of shrinking output, and attention is now focusing on just how far the trade dispute between Washington and China will go.
The uncertainty surrounding the trade conflict between the world's two largest economies appears to set to continue overshadowing whatever happens in Europe, Asia and other parts of the economy.
https://www.wsj.com/articles/german-economy-contracts-as-trade-woes-bite-11565768142?mod=hp_lead_pos2
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