In the first quarter of this year, GDP grown by 0.3 percent. The statistics office now called several reasons for the decline in GDP in the second quarter.
In particular, production in the processing industry and in the construction industry developed worse than expected in June. In addition, private consumption for the second quarter was revised downwards for the new information on the service areas such as the monthly statistics in the hospitality industry for June.
The gross investment in the second quarter decreased significantly by 1.4 percent in the second quarter – they were still slightly increased at the beginning of the year. According to the statistics office, investments in equipment such as machines, devices and vehicles fell by 1.9 percent, investments in buildings by 2.1 percent.
Foreign trade was also unable to provide any positive impulses: from April to June 0.1 percent fewer goods and services were exported than in the first quarter.
The chief economist of the state sponsoring bank KfW, Dirk Schumacher, said that it was “not surprising that exports in the quarterly comparison” decreased easily “. Many companies had preferred exports to the United States in expectation.
US President Trump sparked a customs conflict with trading partners all over the world in early April. He announced high imports for numerous countries, but then lowered them to ten percent to lead negotiations. For EU goods, a set of 15 percent has been on almost all products since the beginning of August.
“The decline in investments should also have to do with the uncertainty of the global environment,” said Schumacher from KfW. The scientific director of the Institute for Macroeconomics and Economic Research (IMK) of the Hans Böckler Foundation, Sebastian Dullien, said that companies should have been waiting for the depreciation conditions improved on July 1st.
In the second half of the year, Dullien expects an acceleration of economic growth. Early indicators such as corporate surveys, building permits and order inputs indicated this, he said. The additional public investments announced by the government and the improved depreciation conditions are likely to stimulate private investments; In addition, thanks to increasing wages and low inflation, a recovery of private consumption can be expected.
Analyst Christoph Swonke from DZ Bank also expects “buoyancy” to expect “buoyancy” in the coming months with a view to the Federal Government’s economic stimulus package. In addition, the agreement in the trade conflict between the EU and the USA should dampen uncertainty, added KfW analyst Schumacher. Both sides had announced the agreement at the end of July, and the Commission published details on Thursday in Brussels. According to this, the US tariffs on cars from the EU are said to fall retrospectively from August 1, from 27.5 percent to 15 percent.
For Federal Minister of Economics Katherina Reiche (CDU), the figures of the statistics office illustrate the need for “brave structural reforms”. They would now have to be implemented “quickly”, she explained in Berlin. Rich called reforms in the flexibility of working hours, the damping of the non -wage costs, the reduction of bureaucratic hurdles and the reduction in energy prices.
Veronika Grimm criticized the economy, and almost all important reforms were currently missing, because the SPD and also parts of the Union were blocked. “This means that there is no growth dynamics,” she told the newspapers of the Funke media group.
