Germany’s pace of growth will drop sharply as demand for the country’s products weakens amid a slowing global economy, according to a forecast by a leading research group, the Financial Times reported. The Munich-based Ifo Institute cut its 2019 economic growth rate estimate for the eurozone’s largest economy from 1.1 per cent to 0.6 per cent. The German economy expanded 1.5 per cent in 2018, the slowest since 2013, according to official data.
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The German Finance Ministry urged Italian lenders to speed up a reduction of soured loans and make more progress in cutting risk, with the warning coming as the government in Berlin pushes for a merger of the country’s struggling banking titans. “The Italian banking sector has long been faced with various structural problems, including the high level of non-performing loans,” the ministry wrote in responses to lawmakers’ questions published by the Bundestag on Thursday.
A once-lucrative business within Deutsche Bank AG catering to hedge funds is on its way to becoming yet another casualty of the German lender’s chronic turmoil, Bloomberg News reported. The German firm’s revenue from prime services declined for a third straight year in 2018, while rivals Morgan Stanley, Goldman Sachs Group Inc. and JPMorgan Chase & Co. all saw jumps, according to people with knowledge of the business.
Industrial production in the eurozone showed signs of stabilisation in January across sectors and in most countries, despite a contraction in Germany, the bloc’s biggest economy, the Financial Times reported. Output in the region rose 1.4 per cent from the previous month, rebounding from a decline of 0.9 per cent in December, better than a forecast from analysts in a Reuters poll of 1.0 per cent expansion, Eurostat figures revealed on Wednesday.
A sharp drop in German industrial production has added to fears that the country’s manufacturing slowdown has extended into 2019 and will weigh on the eurozone economy, the Financial Times reported. Industrial output fell 0.8 per cent in January, Germany’s statistics office said on Monday, in an indication of the threat to exports from weaker global demand and political uncertainty. Analysts polled by Reuters had expected the data to show a rise of 0.5 per cent.
German taxpayers could be left more than 600 million euros ($680 million) out of pocket in outstanding credit to Airbus for developing the A380 superjumbo, the Funke Mediengruppe will report on Monday citing an economy ministry statement, excerpts approved for release showed. Berlin loaned Airbus 942 million euros in 2002 in connection with the A380’s development, of which only a third has been repaid, the media group cited the statement as saying.
Probably the single biggest geopolitical issue for the EU right now, and especially for Germany, is future relations with China, the Financial Times reported. The two countries do have a lot in common. Both are export-driven economies with large external savings surpluses. But Germany’s economic strategy is not nearly as consistent. The German political preference is to reduce public debt. Yet the country’s biggest problem is falling behind in the technological race.
Business confidence in Germany this month slid to its lowest level since December 2014 in the latest sign of weakness in the Eurozone’s largest economy, the Financial Times reported. Financiers views soured on both the current economic conditions and the country’s future outlook, according to the latest business climate index published by the Ifo Institute think tank. The gauge fell more sharply than expected to 98.5 in February from a revised level of 99.3 in January. Analysts polled by Reuters had expected a reading of 99.
Europe’s largest telecoms companies have issued mixed guidance for the coming financial year, warning of slower growth due to competition and continued uncertainty. Deutsche Telekom, the continent’s largest telecoms group by value, has been hit by questions over whether regulators will approve its plan to acquire US rival Sprint this year, as well as the impact of an impending spectrum auction.
German manufacturing activity dropped to its lowest level since 2012 in February according to a closely-watched survey, but the country’s services sector remained resilient, the Financial Times reported. The purchasing managers' index for the manufacturing sector dropped to 47.6 in February, the lowest level since December 2012 and well below the expectations of analysts polled by Reuters for 49.7. A reading below 50 indicates that a sector is in contraction.