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6/17, 1:00 PM (Source: TeleTrader)
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German central bank sees GDP shrinking in Q2

The Bundesbank said on Monday in its monthly report that the underlying economic environment is still "weak" led by the "continuing downturn" in the manufacturing sector. One-off effects that stimulated the increase in gross domestic product in the first quarter are fading or even reversing, it stressed and estimated growth may turn "slightly" negative in the three months through June.

The Eurozone's largest economy expanded 0.4% in the first quarter relative to the beginning of the year as private consumption and the construction sector were the strongest engines. Other contributions came from the mild winter, which helped building activity, and the purchases of passenger cars, which have earlier been deferred as vehicle makers struggled with the implementation of the Worldwide Harmonised Light Vehicle Test Procedure (WLTP) for exhaust gases.

Furthermore, the Brexit uncertainty is seen impacting exporters together with the effect of stockpiling ahead of March 29, which was the originally scheduled withdrawal of the United Kingdom from the European Union, policymakers underscored. On the flipside, they highlighted domestic-oriented activity, saying it is fundamentally intact.

Breaking the News / IT