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Dublin: 7°C Tuesday 29 September 2020

Euro slowdown spreads to powerhouse Germany

Europe’s largest economy has almost stalled, new figures show – raising fears for the region as a whole.

The curve of the DAX stock index yesterday
The curve of the DAX stock index yesterday
Image: AP Photo/Michael Probst

GERMANY’S ECONOMIC GROWTH almost stopped in the second quarter of this year, surprising analysts who expected the Eurozone’s largest market to maintain its strength.

The country’s GDP fell to just 0.1 per cent in the three months to June, well below forecasts of 0.5 per cent, Bloomberg reports. Releasing the figures yesterday, Germany’s federal statistics office also revised the figure for the first quarter of 2011 downwards from 1.5 per cent – which had made it a “star performer” among Western economies, reports the Financial Times – to 1.3 per cent.

Markets reacted badly to the figures, with Germany’s DAX index of stocks already down by 2.63 per cent at the time of writing just shortly after opening. The news comes just days after France, Europe’s second largest economy, posted zero growth in the year’s second quarter.

“This is a serious disappointment,” Joerg Lueschow at West LB told the BBC, adding that the figures show “Germany cannot evade the global slowdown [...] We cannot expect more than stagnation now.” The country had been seen as an engine for Europe’s economy as a whole.

Broker Max Johnson told the Guardian the figures would “further undermine any efforts to resolve the Eurozone debt crisis.” However, another analyst told the paper the decline in growth was a “normalisation”, rather than a “disappointment”.

Read more: Stuck in a rut: French economy records zero growth >

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Michael Freeman

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