Germany Q4 2018 GDP growth was 0%, narrowly avoids technical recession

Germany narrowly avoided a technical recession (2 quarters of negative growth) by growing at 0% (non-negative) in Q4 2018.

Q4 GDP was

  • 0.0% on Q3 2018 (price, seasonally and calendar adjusted)
  • +0.6% on Q4 2017 (price and calendar adjusted)

Germany Q4 2018 GDP

Q4 growth came from positive contributions from domestic demand. Gross fixed capital formation, especially in construction but also in machinery and equipment, increased markedly compared with Q3 2018. While household final consumption expenditure increased slightly, general government final consumption expenditure was markedly up at the end of the year

 

2018 GDP was an annualized 1.4%

Quarterly growth was Q1 +0.4%, Q2 +0.5%, Q3 -0.2%, Q4 0.0%

 

Exports slowdown

Global trade tensions aside, Germany’s main export is … mainly diesel vehicles which are getting more unpopular globally thanks to cheat emissions devices by well – German car manufactures. How dependent is Germany on car exports? See figure below,

Germany Main Exports 2018

 

Germany expected to grow slower in 2019 than in 2018

The European Commission, the IMF and other economists are all expecting Germany to grow at 1.1% in 2019, slower than the 1.4% achieved in 2018. These figures are estimated on an orderly Brexit, what might happen in case of a no-deal Brexit is another story altogether.

 

Related:

European Commission (again) cuts GDP growth forecast for the European Union; Bank of England cuts UK GDP growth forecast; Germany forecast to grow slower than the UK despite Brexit

UK Q4 2018 GDP estimated at 0.2% and 2018 GDP estimated at 1.4%; Business Investment continues to fall

Eurozone Q4 2018 GDP up by 0.2% and European Union Q4 2018 GDP up by 0.3%; 2018 annual GDP growth at 1.8% for the Eurozone and 1.9% for EU; Italy in Recession

Is Deutsche Bank really the next Lehman Brothers?

 

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