Germany’s economy made a slight recovery in the fourth quarter, ending a year in which manufacturing took a battering and the country was dragged to the brink of a recession. The German statistics office estimates that output registered a small increase in the final three months of 2019, a year that saw growth of just 0.6%. That’s the slowest in six years, amid trade tensions and a broader slowdown in demand that added to fundamental structural challenges the country is battling.
The small increase in GDP at the tail end of 2019 may reinforce hopes that the economy is through the worst of the slump. It also means less chance the government will cave to calls that it provides more fiscal support for the economy.
However, German carmakers like Volkswagen are facing a critical period as they push sales of electric vehicles. Geopolitical uncertainty in the Middle East and continued risk of a disruptive Brexit will also weigh on sentiment and momentum.
The figures for 2019 showed investment and exports posted only modest gains. At the same time, private and government consumption as well as construction accelerated. The government recorded a budget surplus of 1.5% of GDP.