The worst of the recession may be over and Germany’s economy, along with related exchange traded fund (ETF), could be riding the road the to recovery.
Recessionary stress on the German economy, the largest in Europe, is easing, reports Simone Meier for Bloomberg. The economy shrunk 3.8% in the first quarter, the most since records started in 1970, and the government estimates a 6% contraction for the year.
Chancellor Angela Merkel has announced $112 billion to pull Germany out of its worst recession since World War II. The European Central Bank has reduced benchmark interest rates to record low of 1%. The full impact of the fiscal and monetary policies will not be felt for a while.
The ZEW Indicator of Economic Sentiment for Germany reached 31.1 points, a three-year high, in this month, according to China View.
The decline in industrial production has started to reverse. Exports and incoming orders are on the rise again. But the worst could be yet to come for Germany’s labor market.
Can Germany sustain the improvements it has made in recent months? Watch the trend lines to see for sure – the fund is hovering just below the 200-day, so it’s close.
- iShares MSCI Germany Index (EWG): down 1.9% year-to-date
Max Chen contributed to this article.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.