Deepening manufacturing slump puts Germany on the brink of recession

Economic momentum has stalled for the past year, and there are few signs the situation will improve any time soon

German business confidence extended its decline, falling to the weakest level in almost seven years, as a deepening manufacturing slump put Europe’s largest economy on the brink of recession.

Germany’s export-centered economy is struggling as global trade tensions worsen. GDP contracted in the second quarter and the Bundesbank predicts it could shrink again in the third, and the US-China trade war escalated again at the end of last week.

Blue chips including Henkel AG and Siemens AG have predicted weaker earnings, and the German government has signaled it’s open to fiscal stimulus if the current downturn turns into a more severe crisis.

Ifo’s