German government insists economy not heading for pronounced recession

epa07572640 (FILE) - A tourist sightseeing vessel passes on river Main with the skyline of Frankfurt am Main, Germany, on the background, 19 April 2018 (reissued 15 May 2019). Investigators searched the offices of eleven German banks, private residences, tax offices and asset managers on suspicion of tax evasion against several wealthy individuals throughout Germany. EPA-EFE/MAURITZ ANTIN

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Europe’s largest economy is not facing a bigger downturn or a pronounced recession after contracting slightly in the second quarter but there are no signs of a turnaround yet either, the German Economy Ministry said on Friday.

The German economy contracted by 0.1% quarter-on-quarter in the April-June period and some weak data since then has fuelled concerns that the economy could slip into recession in the July-September period.

This week several institutes said the economy would slide into recession in the third quarter.

“The German economy is going through a weak phase,” the ministry said in its monthly report.

“A bigger downturn or even a pronounced recession is not expected at the moment. However, indicators don’t point to an economic turnaround for the better either,” it added.

The German economy has weakened as its export-dependent manufacturing sector languishes in recession, partly due to trade conflicts and uncertainty linked to Britain’s planned departure from the European Union.

The ministry said exports were moving sideways but private and state consumption were providing noticeable support to the economy.

Via Reuters

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