The US has taken the German economy "in the pincers", Gabor Steingart, an economist at Focus, noted. A revival is possible only if Germany finds a way to loosen its dependence on the US.
The German economy fell into the trap set by the US. Steingart believes that the US is likely to make its economy stronger by weakening its main rivals - the EU and China. Germany, as the engine of the eurozone’s economy, will be the first to face difficulties.
The German economy is also in dire straits because of the US Inflation Reduction Act. Whilst inflation in the US is gradually slowing down, Germany is still struggling to tame it. This is why German manufacturers and businesses are going through hard times. American companies, on the contrary, have a competitive advantage. In addition, German producers have to reconsider their cooperation with China due to US sanctions imposed on Chinese semiconductors.
"Under the current conditions, the German economy has a powerful competitor in the face of the United States. In Washington, the era of 'free trade' has given way to an era of 'managed trade'," Steingart said.
Earlier, analysts at the Ifo Institute warned that rising oil and gas prices would take a heavy toll on the German economy in the period from 2021 to 2023. Real income loss over these three years is expected at almost €110 billion, or 3.0% of Germany's annual economic output.
*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.
-
Grand Choice
Contest by
InstaForexInstaForex always strives to help you
fulfill your biggest dreams.JOIN CONTEST -
Chancy DepositDeposit your account with $3,000 and get $1000 more!
In April we raffle $1000 within the Chancy Deposit campaign!
Get a chance to win by depositing $3,000 to a trading account. Having fulfilled this condition, you become a campaign participant.JOIN CONTEST -
Trade Wise, Win DeviceTop up your account with at least $500, sign up for the contest, and get a chance to win mobile devices.JOIN CONTEST