Graph of the week: Signs of weakness in the German economy

After the Chinese economy has already been slowing down for quite some time, the past six months have shown a significant weakening of the US economy. Up until quite recently the eurozone economy seemed unaffected by those developments, but that was never going to last. Recent data on the German economy illustrates that external weakness is starting to reach Europe.

Ger gdp ifo exp

The German economy grew at 1.6% in 2014 and 1.4% in 2015. Recent data suggest 2016 could be significantly weaker. Economic weakness in the rest of the world, a somewhat stronger euro and possibly domestic concerns about the banking sector are affecting German business confidence. Expectations of German business leaders have deteriorated sharply, and are now at the lowest level since 2012. This could be an overreaction to recent market turmoil and highly publicized issues in the banking sector. However, in the past German business leaders had a very reliable view on where their economy was heading. As such, the business confidence data are a clear reason for concern.

In combination with the concerns that were already present, these signs of weakness at the core of the eurozone are almost certain to push the ECB into additional stimulus measures at its next meeting on March 10.



Dit artikel werd geschreven door Bart Van Craeynest

op 23 februari, 2016

Bart Van Craeynest ging na zijn studies economie aan UFSIA aan de slag als econoom in de financiële sector. Hij volgt in deze functie al meer dan 15 jaar de Belgische en de internationale economische ontwikkelingen, en de impact hiervan op de financiële markten. Na een langere passage bij een grootbank werd hij in 2010 hoofdeconoom bij een Belgische financiële instelling. Sinds 2015 vervult Bart Van Craeynest bij Econopolis de rol van hoofdeconoom. Hij is medeverantwoordelijk voor de economische lijn van het huis en nauw betrokken bij het uittekenen van de beleggingsstrategie.