Laggard or locomotive? Is Germany still Europe's economic engine?

Germany is still considered Europe's economic powerhouse, but recent data paints a sobering picture. Our Chief German Economist, Robin Winkler, says that "the German economy is stagnating". This stagnation contrasts with the modest growth seen in the rest of the Eurozone, which has been driven by strong performance in sectors like tourism. “The German economy is very skewed towards industry…so that explains the gap,” Robin adds.

While German consumers have benefited from rising real wages, consumption hasn't rebounded as strongly as expected. Uncertainty and a cautious outlook seem to be holding consumers back from spending. But Robin still sees household consumption as the best bet for a recovery before falling interest rates may boost investment and construction next year.

Listen to our german podcast on this topic:
https://pod.link/1483802695

Find out more:
https://www.dbresearch.com/PROD/RPS_E...

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