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The German economy contracted in Q2 for the first time in 50 years

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Miguel A. Rodriguez
Miguel A. Rodriguez
14 September 2020
Europe’s largest economy took a hit from the pandemic

All eyes were on Europe today, as the German Destatis (The Federal Statistics Office) and the Federal Employment Agency released their quarterly and monthly reports.

For the German economy was a day of records, as far as the economy is concerned. In the past quarter, the economy had the worst deterioration in Q2 since 1970, according to Destatis. The GDP fell by 10.1%, exceeding the economists' expectations of 9%. The drop was due to a decrease in exports and imports of goods and services. The household final consumptions expenditure and capital formation in machinery and equipment dropped as well. From analysts’ point of view, 40% of the losses might be recovered in the third quarter. 

Not only the GDP contracted, but also unemployment. The latest report showed that the number of unemployed people dropped din July by 18,000 reaching 2.23 million people. The figures came against the 43,000 people forecasted to be unemployed.

Currently, the unemployment rate is 6.4% after adjustment.

The market reacted aggressively, and Germany30 lost 2.5% after the report.

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Sources: forexfactory.com, reuters.com


This information/research prepared by Miguel A. Rodriguez does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. The research analyst primarily responsible for the content of this research report, in part or in whole, certifies that the views about the companies and their securities expressed in this report accurately reflect his/her personal views and consequently any person acting on it does so entirely at their own risk.The research provided does not constitute the views of KW Investments Ltd nor is it an invitation to invest with KW Investments Ltd. The research analyst also certifies that no part of his/her compensation was, is, or will be, directly, or indirectly, related to specific recommendations or views expressed in this report.The research analyst in not employed by KW Investments Ltd. You are encouraged to seek advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit that conforms to your specific investment objectives, financial situation, or particular financial needs before making a commitment to invest. The laws of the Republic of Seychelles shall govern any claim relating to or arising from the contents of the information/ research provided. 

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Miguel A. Rodriguez
Miguel A. Rodriguez
Financial Writer

Miguel worked for major financial institutions such as Banco Santander, and Banco Central-Hispano. He is a published author of currency trading books.