Following earlier reports that Germany was experiencing financial troubles, the latest data revealed that the European country narrowly dodged a recession with 0 percent growth in the fourth quarter of 2018.
Multiple outlets reported that Germany's state statistics agency, Destatis, released the figure after previously recorded a 0.2 percent drop in growth during the third quarter of last year. Analysts have attributed the disappointing figures to slowing global trade since the country is centered on exporting.
Low water levels on the Rhine River added to the damage as commerce was impacted. The auto industry's slower movements also affected the country's overall growth, CBC News reported. Automakers faced difficulties in certification procedures with new emission tests that gave them less time to fix engine lapses.
Germany performed better in the first half of 2018 with a year-on-year growth increase of 1.2 percent. By the second half, the country's growth rate dipped to 0.6 percent, igniting fears among economists and financial analysts.
Due to the sluggish progress of the German economy, some analysts speculated that the European Central Bank may hold off on increasing rates much longer. Other experts also predicted that 2019 may record similar figures. Chief Europe Economist at Capital Economics, Andrew Kenningham said Q4 2018's data "bodes ill for economic growth this year too."
ING Germany's Carsten Brzeski pointed out that "the German economy escaped a technical recession with the smallest margin possible. The black eye just got blacker," adding, however, that there is hope for a rebound.
Aside from troubles in the auto industry, other groups have put the blame on Brexit. According to Deutsche Welle, the German industry and trade association (DIHK) said group members were largely concerned about the dangers the British exit could pose to the trade industry.
The group stressed that there could be tariff-related risks and uncertainty factors for Germany if Britain exits the European Union (EU) without a deal on March 29. Previously, German firms said they worried about how to handle doubt and fears among consumers as Brexit uncertainties loom.
Meanwhile, it was reported Thursday that Germany's finance ministry is considering the possibilities of handing out a 15 percent special tax on some of the world's biggest tech giants. According to Reuters, the Wirtschaftswoche Magazine said the ministry is looking into taxing foreign internet firms such as Facebook and Google.
The ministry clarified that there are still no final plans about the potential internet tax on foreign providers. However, some experts pointed out that if things push through, Germany could find a new stepping stone towards recovery through foreign taxes.
