UNITED STATES (OBSERVATORY) – The European Central Bank (ECB) will soon face difficulties, as the European economy slows, and Germany is at the head of the recession.
Gustav Horn, one of the most experienced analysts on business cycles in Germany, says that the probability of a German recession is increasing noticeably.
In his view, the uncertainty in the economy and especially in financial markets, which was largely caused by US trade policy, has an impact: the risk of Germany’s fall into the recession within the next three months has increased markedly from March to April. This is evidenced by the economic indicator of the Institute for Macroeconomics and Business Cycle Studies (IMK) of the Hans Boeckler Foundation.
Between April and the end of June, an early warning tool that combines the latest available data on the economic situation indicates an average probability of a 32.4% decline. In March, the risk of recession was only 6.8%.
The indicator, which operates in accordance with the traffic light system, jumps from “green” to “yellow” and, thus, signals an increase in uncertainty (a recession probability of 30%).
Eurointelligence noted that Horne said he was not yet ready to review his optimistic forecasts for 2018 and 2019. due to the continuing strong domestic demand. But if the current trend in the indicator continues, the forecast should be sharply revised downward.