Deutsche Bank: Surveys, data herald recession

Wednesday, 14. August 2019 13:47

Germany's gross domestic product is on pace to rise by a mere 0.3% this year, Deutsche Bank said on Wednesday in a client note as it revised the outlook from 0.7%. Deterioration evident from macroeconomics and data from leading polls make the possibility of a recovery next year "unlikely," the lender's analysts claimed. They noted the 0.1% contraction in the economy in the second quarter was the second one in a year and estimated that the fall would accelerate to 0.25% in the three months through September, which would mark a technical recession.

The report adds a projection for no change in GDP in the fourth quarter but with the possibilities for the major global risks to materialize and bring "a further escalation." In that case, the downturn could continue in 2020, the bank said and highlighted the fall in industrial production in June by 1.5% and the worsening in sentiment and activity reported by Ifo, purchasing managers and the ZEW institute.

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