The Slovenia Times

German recession rather unlikely but potentially major issue


"If Germany records an economic decline in the third quarter compared to the previous years, that would mean graver problems than just red figures."

"If the country slips back into recession in the third quarter, than all the Slovenian legislators' alarms would have to go off."

Pointing out that technical recession in Germany is unlikely, as one-off events that occurred last year will not repeat this year, the paper says that the country's economy saw a drop in the April-June period mostly due to a decline in exports which was caused by US-instigated trade conflicts and more modest growth in China.

Since the river Rhine, hit by drought, wreaked havoc with Germany's economy in the west last year, trouble would already be signalled by zero growth, the paper says in When Germany Sneezes.

"That would almost certainly mean that the situation at home is getting worse as well. But that is not likely to happen at all," the commentary remains optimistic in the end.

However, it points out that Slovenia has much less elbow room in terms of adopting fiscal measures which would prevent a slowdown than Germany and could be trembling in fear for its desired more than 3% growth at the end of the year if the situation goes south.

"Thankfully, Germany has this manoeuvring space."


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