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Risk of Recession in German Economy Shoots Up to Nearly 60%: IMK

According to the Macroeconomic Policy Institute (IMK), the possibility of the German economy slipping into a recession has risen to 59.4% in August from 43% in July. This is thie highest level this index has touched since 2012/2013.

The export-oriented economy of Germany has been weakening over the past few months over escalating trade tensions and Brexit uncertainties. Germany’s manufacturing sector has been in a technical recession for the past eight months.

The IMK index analyses economic data like industrial orders, industrial production, business sentiment and job openings, to measure the risk of a recession over a period of three months. The escalating trade war between the US and China has weighed heavily on overseas demand, impacting German manufacturing.

In addition, an increasing likelihood of a no-deal Brexit could also cause significant decline in German exports to Britain in the coming months, which could drive further contraction in the manufacturing sector and the overall economy as well.

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Arslan Butt
Index & Commodity Analyst
Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics.His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker.His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.
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