It’s time to worry about the European Economy

October 8, 2015 by

The slowdown in economic activity in china is a major challenge to the global economy. Global market has been badly hit by this horrible development from china and all major central banks are trying to modify their various monetary policies to adjust to this situation. Unfortunately, we might just be missing out on the fact that another major economy t seems to be on the verge of a slowdown.

German has the largest economy in Europe with a GDP of 3852.5Billion USD which means any economic slowdown in Germany would have a big impact on Europe’s economy as a whole. Looking at some Economic data released for the months of August and September, it shows some weakness in core industries in Germany. For example, German factory import slumped from 2.3% to -3.1%, export also slumped from 2.2% to -5.2%. German industrial production also saw a drop from 1.2% to -1.2%, service industry data also shows a downward reading from 54.3 to 54.1.these figures shows that all the major sectors in Germany are (industrial and service) are now having some pill over effect from Chinese economy. We should also remember that, one of Germany’s major car producers also suffered some massive plunge in their share value due to Car emission irregularities.

It should be recalled that quantitative easing is currently going on in Europe, which means economic activities should be at its best. Economic activities are expected to be rapidly growing and drive inflation up to as high as 2%. But this is not happening, despite the Quantitative easing, the economy is showing some signs of weakness. If this continues European Central Bank might have to increase the ongoing Quantitative easing. Chinese economy seems to be the only economy the world perceives to be slowing down, but the European giants are also on the verge of a decline.