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German economy expected to stagnate in the third quarter as US sanction inflict losses in trade - confidence plunging

OWoN: Like clueless fools they followed US Political game plays and now face a horrible consequence.

What happens when decisions are not thought through. The world needs to BOOT Washington out. The enemy IS America!

Hans Werner Sinn, president of the Ifo institute, said the German economy was "no longer running smoothly" - Image: Alamy

German businesses frozen by Russian sanctions

German manufacturers, wholesalers and construction firms all report a decline in business confidence, says Ifo, as experts predict the economy will stagnate in the third quarter

The Telegraph
By Szu Ping Chan
24 September 2014

German business confidence plunged for a fifth consecutive month in September amid ongoing tensions between Russia and the West that experts said would freeze Europe's top economy in the third quarter.

The Ifo economic institute's closely-watched business climate index fell to 104.7 in September, from 106.3 in August. This is below economists expectations of a decline to 105.8, and represents the lowest reading since April 2013.

The index was dragged down by a sharp drop in business expectations, which fell to 99.3 in September. This was the lowest level since December 2012, and below the long-run average of 100.4.

Manufacturers, wholesalers and construction firms all reported a decline, according to the poll of 7,000 executives. Business confidence has now been falling since May, representing the longest period of decline since 2012, following the second Greek bailout.

Hans-Werner Sinn, president of the Ifo institute, said the business outlook continued to "cloud over" in September. "Hardly any stimulus is expected from export business," he said in a statement. "The German economy is no longer running smoothly."

The Ifo's business cycle clock suggested the German economy was entering a "downswing"

Klaus Wohlrabe, an economist at the Ifo, said he expected the German economy to stagnate in the third quarter, following a contraction of 0.2pc between April and June.

Mr Wohlrabe described the Ukrainian crisis, which has led to tit-for-tat sanctions between Russia and the West, as a burden that was hard to quantify, but said companies with ties to Russia were somewhat more pessimistic in their survey responses. The Ifo expects domestic consumption to drive the bulk of growth in 2014, and Mr Wohlrabe expects German growth of around 1.5pc this year.

Germany is one of the largest exporters of agricultural products worldwide, and Russia's year-long ban on some imports from the West will hit the economy (Source: Global Trade Atlas, FAS Berlin,

Other analysts said Germany would narrowly avoid a technical recession in the third quarter, which is defined as two consecutive quarters of falling output. "We think that the labour market strength combined with robust wage developments will continue to support German domestic demand growth," said Evelyn Herrmann, an economist at BNP Paribas.

"However, Germany remains a very open economy, with a large manufacturing sector vulnerable to external effects. This said, while uncertainty currently overshadows surveys, better growth in key export markets such as the US and the UK should offset most of the actual growth implications from Russian tensions."



  1. Fist in to face .... only language they understand....

    No More Foreplay: Russia Threatens European Gas Supply Disruptions

    Russian energy minister Alexander Novak threatens gas supply disruptions if the EU continues to re-export Russian gas to Ukraine.....

  2. VIENNA, September 25. /ITAR-TASS/. Hungary’s gas operator FGSZ Ltd. has suspended gas supplies to Ukraine for an indefinite period of time, the company said on Thursday.
    The decision was made to meet the growing domestic demand for gas, the company said.
    Gas supplies to Ukraine were suspended at 18:00 local time on September 25. “Gas supplies have been halted for an indefinite period of time,” the company said.

    This was fast...

  3. Germany's DAX is tumbling this morning (and back in the red for 2014) as The Moscow Times reports Russian courts could get the green light to seize foreign assets on Russian territory under a draft law intended as a response to Western sanctions over the Ukraine crisis. Whether this is retaliation at Italian tax police seizing €30m in assets, including a luxury hotel in Rome and two villas in Sardinia, controlled by Arkady Rotenberg, is unclear, but the timing is highly coincidental and Rotenberg has been a longtime ally of Russian president Vladimir Putin.

    And even better......Russians checked their muscles in huge exercise, they know they can handle the situation when the trigger is pulled ...... we will see what to expect. Petro-dolar might be hit very soon I would guess.


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