Germany calm

China Crisis? What China Crisis?

Consumer confidence is high in Germany.
  • Why it matters

    Why it matters

    China is the world’s second-largest economy and is strongly tied to the German economy, Europe’s largest.

  • Facts


    • Government officials said on Tuesday the German economy grew by 0.4 percent in the second quarter.
    • In the first half of 2015, Germany’s budget surplus reached €21.1 billion ($24.07 billion).
    • Positive business indicators led state-owned German bank KfW to raise its 2015 growth forecast from 1.5 to 1.8 percent this week.
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German economists agree the cooling of China’s economy is an increasingly serious problem. Yet the development doesn’t seem to be affecting their homeland.

Germany’s top economist, Hans-Werner Sinn, said the country’s economic system continued to be steady amid the global financial turbulence, and the monthly business climate index issued by his Ifo Institute for Economic Research rose by 0.3 to 108.3 points on Tuesday – surprising most bank economists.

The business managers polled as part of the index assessed their firms’ current economic situation as being significantly improved over the previous month, and saw business in the coming six months as more or less stable.

As a result, the German government-owned development bank KfW raised its growth forecast for Germany from 1.5 to 1.8 percent for this year, and 2 percent for 2016.

Sigmar Gabriel, Germany’s vice chancellor and economy minister, appears convinced the stock market plunge in China is no threat to the German upswing. “From what we can judge, it will not contribute to a deterioration of developments in Germany,” he said. “You can see in the development of the euro there is again greater activity in Europe.”

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