18 Aug, 2014
EU sanctions against Russia strangle European economy slowly but surely – English pravda.ru
The German economy, for the first time since 2012, dropped by 0.2 percent in the second quarter, resulting in the absence of GDP growth in the eurozone. The Ukrainian crisis and the trade war with Russia have played a significant role in the setback, which casts doubts on the plans to restore the growth in the second six months of the current year.
Last year, the German economy rescued the eurozone from the longest recession. In the first quarter of this year, German GDP grew by 0.7% (revised from 0.8%). German statistical office Destatis said that one of the reasons for the decline in economy in the second quarter was the previous period, which was a positive one due to warm winter. Another factor was the rapid growth of imports.
Previously, Deutsche Bank analysts noted that the geopolitical crisis in Ukraine and strained relations with Russia would have a knock-on effect on the German economy as well. German exports are particularly sensitive to the weakness of the Russian economy. The decline of Russia’s GDP by one percentage point was historically reflected in the reduction of exports from Germany to Russia by 3.5 percentage points, economists of the bank said.
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