Germany could enter a recession by the fourth quarter of 2019, but this could ultimately benefit the region, according to one investment bank.
div > div.group > p:first-child"> Germany could enter a recession by the fourth quarter of 2019, but this could prompt a key period in the continent's economic evolution that could ultimately benefit the region, according to one investment bank.
"We firmly believe that any macro change has to come from a breakdown or a crisis, and as such we see 2019 and 2020 as key years for Europe's evolution … Germany grew too complacent, and so did the EU as a whole. Now the new reality has to see Berlin expand spending to be of benefit to the rest of Europe. Overall, a new common ground will be found from a more fragmented Europe," the Danish investment bank said in its latest quarterly outlook.
Jakobsen believes that the"collapse of German growth" is firmly in the spotlight and said in the research note that there is a risk of recession there by the fourth quarter of 2019, even without a trade spat with the U.S. He added that Germany's successful economic model — which focuses on manufacturing and exports — would ultimately need to be updated.
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