2023-06-26 12:08:16
Berlin
The largest and most important economic institute in Germany (Ifo) announced, on Monday, that its index of the growth of the largest economy in Europe recorded last June, a decline for the second month in a row, from 91.5 points in May to 88.5 points.
The head of the institute, Clemens Fuest, said in a press conference in Munich, southern Germany, that “the weakness suffered by the industrial sector enters the German economy into shallow waters,” explaining that managers of large and medium German companies look at the work of their companies with “suspicion.”
He added, “Experts at the institute expect the German economy to contract in the second quarter of the year.”
According to the institute, “the atmosphere is bad” in almost all economic sectors, noting that the industrial sector is at the forefront of these sectors, due to the significant decline in German exports from within Germany and from the European neighborhood and other countries outside Europe.
The institute pointed out that the European Central Bank’s perseverance in raising interest rates in the euro area was the reason for the decline in demand for German industrial goods.
Since the emergence of the problem of high inflation in the euro area, the European Central Bank continues to raise the interest rate, to reach, according to the latest hike, 3.5 percent, which means the bank’s abandonment of the policy of soft loans and pumping liquidity into the financial markets.
The German Federal Statistics Office had announced a few weeks ago that the German economy shrank in the first quarter of this year by 0.4 percent, following a contraction of 0.5 percent in the last quarter of last year, which means that the economy entered a stage known as a “technical recession”.
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