Is the German economic model faltering?
Despite ominous forecasts, the German stock market is also participating unhindered in the rally that most markets saw in October. The DAX index rose 8.4 per cent last month. This is striking, as virtually all indicators point to a very bleak outlook for the eurozone’s largest economy. Is the German economic model faltering?
Chart of the week: A sudden halt to spending
German consumer confidence has fallen to its lowest level ever, it became clear last week. Never before have German consumers been so negative about the economy and their financial prospects. And Germany is not alone.
Far from it. In the United States, the United Kingdom and the Netherlands too, consumer confidence recently reached an all-time low. The extremely negative sentiment among consumers is a global phenomenon caused by another global phenomenon: extremely high inflation.