Germany, like much of Europe, is having a huge issue with unemployment and inflation issues in their economy this summer. Germany's inflation rose higher than expected to 2.1% in August while in July it rose at a much better 1.8% .During this core inflation, which strips out the food and energy inflation stayed at steady 2.7% while unemployment rose much higher with it reaching 6.4% which is well above where they want to be. These pressures are being compounded by wider issues of the newly implemented U.S. tariffs, which could have an even worse affect in the months ahead.
The U.S and EU struck a trade agreement in July, which included a 15% tariff rate on much of the exported goods into the U.S. economy. This has a huge affect on Germany because of their highly export-driven economy which could cause an overcapacity at home, lowering the prices of these goods. These decisions have already contracted the country's GDP expanding by 0.3% in quarter one, and then contracting by 0.3% in the next period. The full impact of the tariffs remain very much uncertain, but they could cause the Central Bank to consider cutting rates at their next couple of meetings.
https://www.cnbc.com/2025/08/29/german-inflation-august-2025.html
3 comments:
This is an interesting commentary on how the tariffs implemented by the United States have an impact on other nation's economies. While the inflation rate and unemployment rate in Germany is a cause for concern, the newly implemented tariffs pose an added challenge for these economies. I am interested to see how the tariff decisions continue to effect other nations.
it's very interesting to see how the German economy is struggling. I do see the arising problems of inflation and unemployment I hope my friends in Baumholder aren't taking to much of a hit with these issues.
Post a Comment