trending Market Intelligence /marketintelligence/en/news-insights/trending/THyLPMwKgXCXoVYpDc-kLg2 content esgSubNav
In This List

Report: Germany preparing stimulus measures to deal with possible deep recession

Podcast

Street Talk Episode 87

Blog

A New Dawn for European Bank M&A Top 5 Trends

Blog

Insight Weekly: US banks' loan growth; record share buybacks; utility M&A outlook

Blog

Banking Essentials Newsletter 2021: December Edition


Report: Germany preparing stimulus measures to deal with possible deep recession

Germany's government is preparing a stimulus plan to boost the domestic economy and consumer spending and prevent large-scale unemployment in the case of a deep recession, Bloomberg News reported, citing two people familiar with the matter.

The incentives under consideration include boosting income through social welfare, improving domestic energy efficiency and promoting short-term hiring, according to the report.

This follows the German central bank's warning that the economy could decline further into recession in the third quarter after falling 0.1% in the second quarter, citing continuously weak industry performance and declining exports.

"Future developments will hinge on how long the present economic dichotomy lasts and which direction it takes once it dissolves," the Deutsche Bundesbank reportedly said. "As things currently stand, it is unclear whether exports and, by extension, industry will regain their footing before the domestic economy becomes more severely affected."

This comes after increasing signs of weakness in Europe's largest economy, with German economic sentiment declining to its weakest level since 2011 in August and the foreign trade surplus narrowing to €18.1 billion in June from €18.7 billion in May.

In June, the central bank trimmed its 2019 GDP growth forecast to 0.6% from the 1.6% estimated in December 2018, saying the economy is cooling down as "lackluster export growth" takes its toll on the country's industry.