Русская версияOne thing is clear -- Germany is past its peak when it comes to
economic performance.
The party --surging exports and strong
domestic investments -- is over.
Still, there's some tangible relief at the reversal in economic
fortunes because things could have been much worse. The German
economy shrank by 0.5 percent in the second quarter of this year --
that's bad but it's not going to really cripple the country's
economy.
Bildunterschrift:
Großansicht des Bildes mit der Bildunterschrift:
Karl Zawadzky
It would be highly surprising if all the big economic powers could
simply shrug off the negative factors that have in recent times
plunged the global economy into crisis.
In the US, an absolutely superficially-financed housing bubble has
burst, triggering a finance and banking crisis in America and
Europe. The real estate boom is also over in Britain and Spain, two
large European Union nations. The dollar has taken a battering
while the rise of the Euro has thrown a dampener on European
exports. Oil prices have climbed to levels unimaginable until
recently and food prices have skyrocketed. Finally, inflation in
the euro zone has soared out of control, prompting the European
Central Bank to raise interest rates.
All this has put a brake on Germany's economic growth rate. Within
a short period, both corporate and consumer sentiment has
plummeted. Talk of a long-lasting economic upturn has been replaced
by dire predictions of stagnation or even recession coupled with a
lasting price rise.
But the facts speak against it. The weather is one of the main
reasons for Germany's economic slowdown. Whether it had to with
climate change or not, the fact is that the last winter practically
didn't materialize. Add to it the fact that tax benefits for the
construction sector were phased out.
Both those factors led to the fact that construction sites early
this year weren't closed, as is usually the case, but rather
that the economy grew in the first quarter by 1.5 percent --
something it hasn't done in 12 years. This surge in growth was
missing in the second quarter.
That means slowing economic growth is partly due to statistical
interpretation. If you assess the first two quarters of this year
individually, a dramatic decline becomes apparent. If you consider
the first half of the year as a whole, you have an economic growth
rate of 1.2 percent. In the face of the negative factors affecting
the world economy, it's quite substantial.
But one thing is clear -- if the global economy has to battle with
serious problems such as high oil prices, a finance crisis and
volatile currency markets, it will drag the German economy into the
crisis. That's because the German economy, like no other economic
power, is reliant on exports which make up almost half of Germany's
economic performance. A decade ago, that share was only 27 percent.
The current economic downturn looks worse than it actually is. It
won't change the fact that Germany's economy will grow in the
current year. German Economics Minister Michael Glos is sticking to
growth predictions of 1.7 percent.
But that's one percentage point less than last year; for the coming
year, experts predict a further worsening of the economy. It's not
the decline in the second quarter but rather the downward trend
that's sparked concerns because it's coupled with a strong price
rise that hampers the much needed lowering of interest rates by the
European Central Bank.
Developments on the labor market are still positive but a lasting
economic slowdown will soon change that. The ranks of unemployed
will rise again.
There's a reason for the bleak outlook -- the party is over. For
many, it's associated with a hangover -- just like in real life.
(Deutsche Welle)
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