Germany’s economy stagnated in July, leading to widespread concerns even as the European Union registered an unexpected growth of 0.6 per cent in the second quarter compared to the previous quarter. The EU has been one of the largest trading partners for India. EU’s economic slump could dent India’s overall exports.
In June, Germany, the largest economy of the EU witnessed an 8.8 per cent slump in retail sales. What is worrying Europe’s policymakers is the fact that this is the biggest drop since officials started keeping records in 1994, CNN said.
The acute energy crisis in Europe has now ended Germany’s three decade run of a trade surplus. Data released this month showed that in May, the country slipped into a deficit for the first time in more than 30 years, driven by surging energy prices and shrinking supplies especially with Nord Stream 1 shutting down for maintenance.
Germany’s trade balance for 2021 was $233.64 billion, an increase of 6.09 per cent over 2020 when it recorded $220.22 billion.
“Germany, in particular, is in crisis mode and will likely see much worse, as its entire economic model—based on energy-hungry manufacturing, cheap Russian gas, and a self-mutilating shutdown of nuclear energy that Berlin still won’t reverse—is on the verge of collapsing without a plan B,” Foreign Policy added.
Many cities in Germany could even look at rationing warm water in the coming winter months.
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