German economy stagnated in fourth quarter

  • German economy stagnated in fourth quarter

German economy stagnated in fourth quarter

The eurozone suffered its weakest growth since the debt crisis at the end of past year with economists warning the coronavirus will inflict more pain on the bloc's stalling economy. The figure underlines the challenge facing the eurozone.

Both the German and eurozone figures were the weakest since 2013, when the region was suffering from a debt crisis that almost spelled the end of the euro currency.

GDP growth stagnated at 0% in the fourth quarter of 2019 after its struggling export-oriented industry came under pressure from trade tensions, changes in the auto industry and a slowing European economy.

"The overall economic stagnation in the fourth quarter is already a small success", Dr. Fritzi Koehler-Geib, chief economist at KfW banking group told AFP news agency, adding that Germany would have to wait until spring to see signs of recovery.

US consumer spending appears to have slowed further in January, with sales at clothing stores declining by the most since 2009, which could raise concerns about the economy's ability to continue expanding at a moderate pace. -China conflict over trade have been one headwind, as businesses wonder if new tariffs, or import taxes, will disrupt their supply chains of raw materials and parts.

"The effect of coronavirus on global supply chains is likely to keep eurozone and German growth subdued in the short term".

Europe's engine room failed to grow on the quarter for the second time in a year while it was revealed last month that France and Italy's economies both contracted in the final three months of the year.

Government officials said the economy "remains in a weak phase", following "very weak" industrial production and a drop in incoming orders for manufacturing firms towards the end of the year.