Home Economy Germany, Europe’s largest economy, struggles

Germany, Europe’s largest economy, struggles

The Eurozone economy struggles against headwinds from the U.S-China trade dispute and Britain’s departure from the European Union.

The state statistics agency said Friday there was zero growth in the fourth quarter and a mediocre 0.6% increase for the whole year.

The figures did not change the disappointing reading for the entire Eurozone of 0.1% growth during the fourth quarter.

Germany’s troubles are a central problem for the 19-country Eurozone economy and the European Central Bank, which is trying to stimulate flagging growth with newly printed money.

Germany has been a manufacturing and export champion in recent years but those areas have been sluggish.

Consumer spending and services businesses have held up better and kept the country out of recession.

The three biggest economies in Europe all stagnated or shrank in the last three months of the year — number 2 France saw output contract, albeit by a modest 0.1% while heavily indebted Italy shrank 0.3%.

Carsten Brzeski, chief economist at ING Germany, “In general, the German economy remains stuck between solid private consumption and a paralyzed manufacturing sector,” said in a note.

Slowing global trade and the uncertainty caused by the U.S.-China conflict over trade have been one headwind.

Another is structural change in industry, particularly the auto business, where companies must sink billions into developing electric cars and new services based on smartphone apps, both to meet regulatory pressure for lower greenhouse gas emissions and to head off competition from new entrants from the tech industry.