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Warning about a recession in Germany: According to Bundesbank, the economy could shrink again this quarter



The Bundesbank said on Monday that the largest European economy "is likely to remain weak in the third quarter of 2019". It is predicted that GDP could "continue to fall slightly".

GDP decreased by 0.1% in the three months to June compared to the first quarter. A recession occurs when the economy shrinks for two consecutive quarters.
  Five of the world's largest economies are threatened by recession.
Germany faces a multitude of economic problems that analysts have described as a "perfect storm".
The country's economy depends on exporters selling goods to China and the United States involved in a bitter trade war. Weak global auto sales have also hit German automakers, while fears of a disorderly Brexit loom persist. Current data show that industrial production continues to shrink this quarter. Industrial production fell by more than 5% in the last quarter compared to the previous year.

The Federal Reserve's report should increase the pressure on the federal government to spend more on reviving its economy. However, in a country that does not borrow on credit, this remains a difficult sell.

This also strengthens the need for the European Central Bank to take action at its September meeting.

Economists predict that the ECB will lower interest rates already at historic lows. It is also expected that the ECB will signal that it will reintroduce a trillion-euro bond-buying program designed to boost economic growth.

Germany is just one of several major global economies that are facing potential recessions.
The British economy shrank in the second quarter and growth in Italy flattened. Mexico has just evaded a recession and its economy is expected to remain weak. The data suggest that Brazil slipped into recession in the second quarter.

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