According to the first estimate, the German economy shrank again in the second quarter. The Q2 GDP reading was -0.1 percent. In the first quarter, there was a growth of 0.2 percent.
Forecasts suggested that this time the German economy would avoid a negative reading (+0.1 percent). However, this did not happen. The revision of the reading for the second quarter is still possible in the coming months, as it is currently partially based on models. On a yearly basis, GDP fell by 0.1 percent.
The data shows that the German economy continues to struggle with significant problems. The bounce back that started in Q1 was temporary, as the economy disappointed again in Q2. The readings of leading PMI indicators do not provide good prospects for Q3.
Especially the reading from the industry suggests that the sector has fallen into another slump – and the German economy is relatively strongly dependent on the industry. The PMI reading in July was only 42.6. In addition, the service sector, despite still growing activity, is showing signs of a slowdown. The PMI for this sector in July was 52 compared to 53.1 in the previous month. A rebound in the second half of the year is still possible, but it is likely to be not strong.
Bartosz Wałecki, Analyst Michael / Ström Dom Maklerski
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Source: https://ceo.com.pl/niemieckie-pkb-przynioslo-kolejne-rozczarowanie-81536
