German economy July 2016: The saga continues, but not so glossy after all

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Amid Brexit, the Turkish Coup and now also terrorist attacks on its soil, the German economy overall remains strong in July 2016:

Figures regarding the German GDP-development in the second quarter of 2016 are not out yet, however, HSH Nordbank estimates a moderate increase of 0.4% on a QoQ-basis.

The IFO-Business-Climate Index only decreases in a stastical insignificant manner from 108.7  in June to 108.3 in July.  However, the business outlook for the next six months has rather significantly deteriorated from 103.1 in June to 102.2 now. The ZEW Indicator for the current economic climate fell from 53.1 in June to 49.8 in July, while the outlook for the following half year rather crashed from a positive 6.4 in June to a negative 6.8 in July.

German unemployment rate rose moderately from 5.9% in June to 6.0% in July, hence increasing the total figure by 47,000 to 2.661m. According to the German Employment Agency, this increase is only due to seasonal reasons.

As already stated elsewhere, it is rather astonishing how untouched German economy seems to be from the turmoil in the rest of the world. However, as every commentator to the above mentioned indicators now stresses, every outlook has to be taken with a pinch of salt due to the Brexit. Additionally, I would observe the unfolding European Banking crisis in the next days and weeks. Anything happening there could be the tipping point for the whole pyramide to fallo over. Until then, keep calm and carry on…

 

 

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