Europe’s largest economy appears headed for a recession after contracting 0.1 percent during the second quarter, dragging down its annual growth rate to just 0.4 percent. Uncertainty over global trade and poor performance in the automobile industry — thanks to tighter emissions standards and digitization — were key drivers. Before the data was released today, Chancellor Angela Merkel said she saw “no need for a stimulus package.”
Why has Germany been hit so hard? As a major exporter, its economy is particularly sensitive to developments like an economic slowdown in China or sinking investor confidence ahead of a potentially chaotic Brexit.