Just days before Germany’s much anticipated third quarter gross domestic product (GDP) data is released, business leaders and policy makers warn that the euro zone’s largest economy has lost its competitiveness and is on the brink of a recession.
The chair of the German Banking Association, Juergen Fitschen, told CNBC on Monday that it was “undeniable that we have slowed down recently.”
“We cannot insulate ourselves against thefactors that have contributed to the current state of affairs…But, also, [thereis a] slow recovery in some of our neighboring countries and also a lack ofdemand to finance infrastructure projects in Germany itself,” he said.
Speaking to CNBC on the sidelines of a press conference held by the association, he said: “We have to remind ourselves that we have not spared continuing efforts to renew our competitiveness and that is something that applies obviously to our neighboring countries as well,” he continued.
Fitschen’s comments came amid other severe critiques of the German economy and outlook, just days before the release of the GDP data on Friday.
Second quarter data in August showed data showed Germany’s economy had lost momentum, contracting for the first time in over a year. Quarter-on-quarter, GDP contracted 0.2 percent. If the economy contracts again in the third quarter, Germany will technically be in recession.