The fall back in economic momentum in the Eurozone last year has taken a heavy toll on all member nations, including the key economies. Germany posted its weakest economic performance in five years over 2018 with the first flash estimate for activity over the entire year coming in at just 1.5%, marking a sharp downward shift from the 2.2% reading in 2017.
Economy Grows For Ninth Straight Year But At Weaker Pace
The data, released by federal data agency Destatis, showed that while the German economy had indeed grown for a ninth consecutive year, “growth has lost momentum.”
The report noted:
“In the previous two years, the price adjusted GDP had increased by 2.2 percent each. A longer-term view shows that German economic growth in 2018 exceeded the average growth rate of the last ten years (+1.2 percent).”
Additionally, the report noted:
“Both household final consumption expenditure (+1%) and government final consumption expenditure (+1.1%) were up on the previous year. However, the growth rates were markedly lower than in the preceding three years.”
Economy Ministry Cites Reasons For Lower Growth
The German state has been quick to field the excuses for such weak performance with the country’s economy ministry citing a weaker global economy, sales issues in the automobile sector as well as the flu and strikes, as all being reasons why growth was weaker over 2018.
The Dax is currently stalled at a retest of the broken 11019 support level which is holding as resistance for now. Above here, the key level to watch is the 11693 level which holds structural resistance (March 2018 swing low) as well as the completion of a corrective symmetry swing which could set the index up for another leg to the downside.