All eyes are on the German economy which was once perceived as stable and strong. However, the financial state of affairs has been tumultuous and Berlin’s state cabinet recently agreed to a five-year rent freeze to help curb the rising housing costs in the country. Moreover, Bundesbank just published a monthly report that explains how Germany’s economic output is in a deep slump and the country’s monetary system has been beaten by Brexit fears and trade wars.
Many European nations have been focused on the Federal Republic of Germany and its economy. Economists and bankers from the region have been warning that the outlook is looking dreary for the rest of the year and into 2020. According to Germany’s central bank, the German economy has already fallen into the start of a recession. Bundesbank’s monthly report said the “German economic output could have decreased slightly in the third quarter of 2019,” and emphasized that it deflated by 0.1%. The eroding nature of the decline was “mainly due to the fact that the export-oriented industry continued to weaken,” Bundesbank said. The news follows all the warning signs that the next big financial crisis begins in Germany after the greater European Union saw a massive reduction in production. Bundesbank’s recently published report highlights that auto industry revenue in Germany dropped 1.5% between Q2 and Q3.