A V-shaped recovery for Germany?
TEXT OF STORY
Bill Radke: Some promising numbers out of Germany this morning. Exports there jumped 7 percent in June,
and industrial orders continued to rise. Reporter Christopher Werth has more.
Christopher Werth: Germany’s economy runs on selling products to other countries. It typically runs a trade surplus, which is why this surge in exports is good news for German companies. They’ve been hit hard as consumers pinch pennies in the rest of the world. But does this mean Germany is headed for a V-shape recovery? Stefan Schneider is an economist with Deutsche Bank.
Stefan Schneider: Probably not a V-shaped. I mean if you take the picture literally, it would mean that the rebound will be as strong as the slump, and I think that’s exaggerated. So it would be an odd V in a way, meaning that the right-hand side of the V is probably much less steep than the left-hand side.
But Schneider says if you look closely at that odd-shaped V, it does look like the free fall in the German economy has finally bottomed out. It’s also good news for German policymakers, who’ve defended the country’s dependence on exports against pressure to become a more consumer-drive economy like the United States. Schneider says that model hasn’t been shown to work very well either.
I’m Christopher Werth for Marketplace.
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