Germany’s economy is not in crisis, finance minister assures

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Olaf Scholz made the remarks after Germany averted a technical recession in the third quarter

Olaf Scholz, Germany's finance minister, speaks during an interview at the Hotel Adlon in Berlin, Germany, on Thursday, November 14 2019. Germany’s economy is growing slowly but isn't in a crisis and doesn't need a boost from additional spending, Scholz said after the country averted a technical recession in the third quarter. Picture: BLOOMBERG/KRISZTIAN BOCSI

Germany narrowly dodged its first recession in almost seven years with a surprise expansion of 0.1% in GDP in the third quarter, data showed earlier on Thursday. Still, annual expansion has slowed from 2.5% two years ago to only about 0.5% in 2019, as trade woes, weaker global growth and turmoil in the vehicle industry weigh on the export-dependent manufacturing sector.

If a crisis hits, Scholz said that Germany would be prepared to carry out “timely and targeted” measures, such as expanding support for unemployed people. But there “never was a special reason” for a discussion on fiscal stimulus in Germany. There have been some signs recently that the economy may be through the worst of its downturn. Business sentiment appears to have stabilised, and investor confidence about the outlook is improving.Averting a recession could boost Scholz’s bid to head his Social Democratic party in a leadership election this month and weaken the argument of his detractors that the SPD, the junior partner in Merkel’s government, should quit the coalition.

 

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