In its latest monthly report, the German finance ministry highlighted that Germany could experience only moderate growth in the near future on account of external risks even though exports have stabilized. The manufacturing sector, one of Germany’s key growth drivers, has witnessed considerable weakening as a result of global trade tensions and an overall decline in global economic growth.

The finance ministry states in its latest monthly report, “Given the weakening global economic momentum and persistent external risks (for trade), exports are likely to continue to develop only moderately.”

On the positive side, employment remains at record high levels while wage growth also remains strong, supporting private consumption. Strong domestic consumption and construction activity as well as government spending have supported the economy, preventing Germany from falling into recession even as external risks continue to exert pressure.

The ongoing US-China trade war, Brexit uncertainties and weakness in global economic growth are likely to continue into the near future with no resolution just yet. Destatis is due to release GDP figures tomorrow which will shed more light on the state of the German economy.