, 6 tweets, 4 min read Read on Twitter
Confirmed: German #GDP also fell in Q2, by 0.1% q/q. Indeed, German GDP is now only 0.4% higher than a year ago, compared to growth of 1.2% in the UK. The equivalent figure of 1.1% for the euro zone as a whole is now likely to be revised down too... (1/4)
The original timing of #Brexit played a part in the fall in German GDP in Q2 too, as activity (eg exports to UK) was brought forward to Q1. But Germany is also more exposed to global trade wars and the #auto crisis, and worried about its currency becoming too *strong*... (2/4)
What’s more, in contrast to the stabilisation in (most) business surveys in the UK, conditions in Germany are continuing to worsen. See, in particular, the July #IFO and #PMIs, and the latest #ZEW Indicator of Economic Sentiment for August (the lowest since December 2011). (3/4)
What does this all mean for #Brexit? Not a game changer, of course, any more than the UK data. But hopefully it will put some of the hysteria about the UK’s Q2 contraction in perspective. Also, a reminder of why other key EU players want to avoid a disorderly #nodeal too. (4/4)
PS. the eagle-eyed will have noticed that the 0.4% y/y increase in German GDP in Q2 was actually better than expected. This was mainly because the 0.0% q/q figure in Q4 2018 was revised up to a 0.2% gain. But 0.4% y/y is still crap, and the forward-looking indicators are dire.
(Minor caveat: the small upward revision to German GDP in Q4 2018 might rescue the latest y/y figure for the euro zone, so it might only be the euro zone's q/q figure that is revised down.)
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