IMF downgraded its projections for the Euro Area. Economists predict that the EU will get back to the pre-pandemic levels only by the end of 2022.
German companies are optimistic about their future, notwithstanding higher risks
A record number of German companies are assured that the economy in the external markets where they conduct business will improve, notwithstanding the surge of political as well as trade risks. That’s what a study uncovered on Friday pointed out.
About 40% of the 5,100 companies surveyed in March and April by the DIHK Chamber of Commerce and Industry told that they expect positive economic changes in foreign markets over the next 12 months, which appears to be the highest result since the poll started in 2015.
Only 10% told that they expect the economy to weaken, while 50% don’t foresee any changes.
Some financial analysts pointed out that Germen companies see more barriers to trade. However, political meltdowns and economic uncertainties, including Brexit, are visible too.
Nevertheless, the global economy keeps thriving and the German economy undoubtedly derives a number of benefits from this, considering its international character, added financial experts.
In addition to this, market experts told that conflicts in the Middle East and Africa, to say nothing of the US trade protection policy turn out to be primary sources of uncertainty for many German companies.
The given poll was conducted at a time when the dispute over metal duties set by the United States of America was in full swing.
In March, the US President Donald Trump rolled out a 25% duty on steel imports as well as a 10% duty on aluminum, although next month he granted benefits until 1 June for Canada, Mexico, Brazil, the European Union, Argentina and Australia.
His Tuesday’s shocking decision to withdraw the United States from the international nuclear deal reached with Iran in 2015 and also newly- imposed economic sanctions against this Middle-Eastern country can affect all foreign companies that conduct business with the Islamic Republic.
The market sentiment deteriorated amid increasing virus cases in the USA and Australia. Investors prefer safe-haven assets like gold, the US dollar and the Japanese yen.
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