According to news released just this week, the business sector in Germany is losing hope that the economy will improve any time in the near future. Business confidence is down and this is contrary to what had been forecast by Reuters who polled 42 economists who projected an increase in business confidence.
Not only is Germany struggling with their economy, which is at its lowest point since the fall of Lehman Brothers in late 2008, but they are also facing a debt crisis throughout the entire Eurozone. Their business confidence index fell this month as sharply as it did in 2008 which is setting off wider fears of an impending recession of global proportions.
It appears as though it is not only Germany and the Eurozone that are headed for recession but even emerging economies like China seem to be grappling with a slump in the global economy. This was not forecast and is currently adding increased worries over whether or not Germany can maintain the growth that has been evidenced in the recent past.
With a good portion of their exports going to China whose economy is also currently in a slump, Munich thinktank, Thyssen Krupp, believes that Germany has been infected by this slowdown, but they are reluctant as of this time to forecast a recession.
Although Germany’s economy has been a stronghold since the 2009 Eurozone debt crisis began in Greece, new figures are showing that the growth of the GDP has slowed down considerably. The end result is that this is setting off new concerns for economies to the south that relied on stronger economies to the north (i.e. Germany) to offset the growing debt crisis elsewhere in the Eurozone.
It is still too early to predict with any accuracy whether the Eurozone is headed for a widespread recession, but Germany’s slow down in GDP and business confidence will most probably make the nation reluctant to help other European economies as they brace themselves to save their own.