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In view of Arjen van Dijkhuizen, senior economist at ABN AMRO, the highly export oriented Eurozone is one of the victims of global trade conflicts and the global slowdown in manufacturing and trade.

Key Quotes

“Over the past few weeks, Q2 GDP growth numbers were published for individual eurozone countries and for the eurozone as a whole. As expected, quarterly growth in the eurozone fell to 0.2% qoq, from 0.4% qoq in Q1.”

“Meanwhile in Germany, quarterly growth dropped back into negative territory (-0.1% qoq) for the first time since Q3-18. Moreover, the leading ZEW index came in much weaker than expected and dropped back to multi-year lows.”

“German weakness is concentrated in exports and industry. Germany is heading for a recession, as Q3 numbers point to a contraction as well. We expect the German economy to remain weaker than the eurozone aggregate, which should be close to stagnation in the second half of this year but not in recession.”