Germany’s economy shrank in the second quarter of this year, piling pressure on German Chancellor Angela Merkel to unleash fiscal stimulus as manufacturers reel from a US-China trade dispute.
GDP fell 0.1 percent from the previous three months, in line with forecasts, as exports slumped.
The economy has contracted in two of the past four quarters.
Photo: Reuters
Merkel said on Tuesday that the country was heading into a “difficult phase” and even hinted that her reluctance to respond is softening.
The contraction in Europe’s largest economy is weighing heavily on a region struggling to sustain momentum. Growth slowed in most eurozone countries, including France and Spain, Italy is teetering on the verge of recession, and profit warnings from some of the bloc’s biggest companies suggest little sign of a turnaround.
In Germany, sentiment among executives and investors has plunged, suggesting that a government forecast for growth of 0.5 percent this year, the weakest since 2013, might still be too optimistic.
Second-quarter economic output was dampened by trade, with exports falling faster than imports.
Private consumption and government spending were higher than in the previous three months. Investment rose, despite a decline in construction.
The European Central Bank (ECB) has already all but committed to hand out fresh stimulus to jump-start the eurozone economy and is forecast to cut interest rates as early as next month.
ECB President Mario Draghi has been among the chorus of international voices pleading with Germany to loosen the purse strings after running surpluses over the past half-decade.
German industry has been mired in a slump as worsening trade woes and weaker global growth sap demand for machinery and vehicles.
Industrial production suffered its biggest drop in a decade in June and freight volumes at German airports saw the steepest decline since 2012.
Among the casualties is Siemens AG, which said earlier this month that it would struggle to meet financial goals because of a deteriorating economy and heightened political uncertainty.
Automotive supplier Rheinmetall AG also lowered its outlook, scrapping expectations for a “tangible” recovery in the coming months.
Dusseldorf-based Henkel AG also issued a profit warning that summed up Germany’s woes.
The industrial firm is facing pressure on two fronts, a slowdown in the auto industry and weaker demand in China, the same environment that is crippled manufacturing across the country.
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”
Sales in the retail, and food and beverage sectors last month continued to rise, increasing 0.7 percent and 13.6 percent respectively from a year earlier, setting record highs for the month of March, the Ministry of Economic Affairs said yesterday. Sales in the wholesale sector also grew last month by 4.6 annually, mainly due to the business opportunities for emerging applications related to artificial intelligence (AI) and high-performance computing technologies, the ministry said in a report. The ministry forecast that retail, and food and beverage sales this month would retain their growth momentum as the former would benefit from Tomb Sweeping Day
Thousands of parents in Singapore are furious after a Cordlife Group Ltd (康盛人生集團), a major operator of cord blood banks in Asia, irreparably damaged their children’s samples through improper handling, with some now pursuing legal action. The ongoing case, one of the worst to hit the largely untested industry, has renewed concerns over companies marketing themselves to anxious parents with mostly unproven assurances. This has implications across the region, given Cordlife’s operations in Hong Kong, Macau, Indonesia, the Philippines and India. The parents paid for years to have their infants’ cord blood stored, with the understanding that the stem cells they contained