Is The World Economy Slowing Down? Brexit, Trade Tensions Hurting Europe

The GDP growth of the 19-member Eurozone decreased to 1.2% in 2019 amid Brexit uncertainty and trade tensions, official statistics said Friday.

In 2018, the Eurozone grew by 1.8%, with the bloc experiencing 2.7% growth in 2017.

The Eurozone’s economic leader, Germany, narrowly avoided recession in 2019. Germany, an export-driven economy, has been hard hit by the U.S.-China trade war, with German automakers experiencing slower sales in China. Brexit also remains a concern, as the U.K. still remains one of Germany’s top trading partners.

Holger Bingmann, president of the Federation of German Wholesale, Foreign Trade and Services (BGA), said in October that German exporters incurred $3.85 billion in losses in the first half of 2019 due to Brexit anxieties.

French GDP fell by 0.1% in the fourth quarter of 2019, with the government blaming protests in recent months for the lack of growth. French citizens have been demonstrating over pension reform, with strikes paralyzing public transportation in December.

Italy, another large Eurozone economy, shrank by 0.3% in the fourth quarter of 2019, due to weak domestic demand. Spain grew by 0.5% in the last three months of the year, partially due to strong foreign investment and because Spain is less affected by international trade tensions.

Other major global economies saw slower growth last year. Indian GDP growth fell to 4.5% in the third quarter, its slowest pace since 2013. China experienced 6.1% annual growth in 2019, a near 30-year low.