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The German economy barely escapes the recession



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Image The confusion about new emission standards has hit the country's automotive industry

Germany's economy almost avoids a recession in the last three months of last year.

The largest economy in Europe registered zero growth in the fourth quarter of 201

8, the Federal Statistical Office reported. two consecutive quarters of shrinkage, which is the usual definition of recession.

Poor trade performance deteriorated in the economy, and consumer spending remained subdued.

The reasons for slower growth last year include a slowdown in the world economy and a weaker automotive sector, with German consumers less likely to buy new cars amid confusion about new emission standards.

Moreover, low water levels, especially in the Rhine, have affected growth by keeping the movement of some goods.

Jack Allen, senior economist at Europe at Capita "Economics," told the BBC: "If you look at Germany in 2018, we see a rather slow slowdown in growth." We saw household consumption is slow, we have seen that business investment is slow and we have seen a slowdown in export growth

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The Rhine Water Level has been struck by the hot summer

US tariffs for car exports to the EU, which US President Donald Trump has threatened, could have a big impact on Germany, said Mr Allen, but even to avoid these delays in the world economy means that Germany is still expected to grow at around 1% this year, compared with about 1.5% in 2018.

However, Klaus Vursen, the eurozone chief economist at Pantheon Macroeconomics, said he was "optimistic" that the first quarter of this year will be better. "The January [economic] surveys were bad … but net exports will not be free forever, and consumer spending will also have to increase."

The BBC World Service Correspondent

It could not be much nearer. And it is certainly possible that the subsequent revisions of these figures will lead to the fourth quarter below zero and Germany in recession as the term is often defined.

So far it seems to be a very soft patch that has affected much of Europe.

Italy had a recession at the end of last year. The eurozone as a whole managed to continue to grow, despite the weakening performance of its two largest economies. But this is considerably slower.

However, the employment situation in Germany is quite good. Unemployment is among the lowest in the world with just over 3%.


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