Live Markets: Glimmer of hope for limping German economy

VAT AG

27/08/2024 12:32

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    GLIMMER OF HOPE FOR LIMPING GERMAN ECONOMY 
    A trio of data sets released recently painted a gloomy picture of the German economy, with
one confirming Europe's largest economy shrank by 0.1% in Q2 of 2024 and another pointing to
fall in business morale as well as tumbling consumer sentiment.
    The drop in GDP follows a 0.2% quarter on quarter expansion in Q1, and since then a
combination of weak manufacturing sector activity, rising unemployment and uncertainty around
inflation have weighed on the economic outlook.
    "With disappointing second-quarter growth and almost all confidence sentiment indicators
pointing south, the German economy is currently back where it was a year ago: stuck in
stagnation as the growth laggard of the entire eurozone," ING's head of macro Carsten Brzeski
said. 
    Brzeski however pointed out that the highest increase in real wages in more than a decade
could still open German consumers' wallets and there needs to be only a small improvement in
industrial orders to bring the turning of the inventory cycle.
    While the Ifo institute's business climate index fell for a third straight month in August,
it also pointed to little changes in price expectations by companies. Citi analysts said that
suggested that consumer demand was resilient enough to let businesses pass on cost increases.
    
    (Sruthi Shankar)
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    FOR TUESDAY'S OTHER LIVE MARKETS POSTS 
    AUTO PARTS SUPPLIERS POSE INVENTORY RISK FOR EU SEMIS CLICK HERE
    GERMAN AUTOS - POP GOES THE DIESEL CLICK HERE
    MINERS AND AIRLINES LIFT STOXX CLICK HERE  
    LACKLUSTRE START IN STORE FOR EUROPE CLICK HERE
    RATE CUT RELIEF DOUSED BY GEOPOLITICS CLICK HERE

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