Unexpectedly expansionary fiscal policy undermines monetary policy and supports US economic growth. Eurozone: Economic momentum continues to weaken, but consumption could provide slight support. China: The renewed weakness in the real estate sector is likely to further dampen economic growth.
Chart of the month
Survey values from German companies have recently deteriorated further. While manufacturing, construction and retail have been slowing for some time, pessimism is now spreading in the services sector as well. According to the ifo survey, business sentiment in this sector was negative in August, with both the current situation and expectations deteriorating. The Purchasing Managers’ Index for service providers for August reflects this downturn and is now well below the 50-point growth threshold. It looks increasingly likely that Germany will continue to post negative growth figures in the second half of the year.
