Nobody Is Talking About Germany’s Economy And That’s Sad

Germany’s economy is in crisis and we should talk about it because there is life outside U.S-China trade war.

What Happened ❓

Germany’s industrial output declined 1.7% in October against expectations for a 0.1% surge.

Why Is This Important? 🤔

Because Germany recently escaped from falling into a recession.

A recession is when the economy plunges significantly for at least two quarters and Germany’s economic growth was already in the red in the previous quarter. So, everyone was saying that the country’s economic growth will continue to plunge and it will go into a recession in November.

Surprise, surprise! That didn’t happen as Germany posted a 0.1% growth.

And people were happy, drinking huge mugs of beer until the industrial output data came on Friday because that data indicated that Germany’s economy is not showing any signs of a revival.

Why Is This Happening? 😕

It’s a well known fact that Germany relies heavily on exports for revenue. The U.S-China trade war, doubts over Brexit and a steep fall in car industry output (which happened due to new emission rules and the shift to electric vehicles) have affected exports.

Also, the country’s manufacturing plunged 1.7% in October. So, how can you export things when your manufacturing itself is down?

Should This Worry Me?

Yes.

Germany is India’s largest trading partner in Europe. In 2016, bilateral trade between Germany and India was valued at over €17.4 billion. Also, Indian corporate entities have invested more than €6.5 billion in Germany, especially in sectors such as IT, automotive, pharma and biotech.

In conclusion, India has trade relations with multiple countries and we are not solely dependent on Germany. However, if Germany’s economy continues to fall, we will feel the pinch sooner or later. Apart from the Indian economy, please keep Germany’s economy in your prayers as well!