Morning Briefing: Drei Gründe, warum Deutschland besser dasteht als gedacht

Good morning, dear readers, as this is a typical market-friendly newsletter, I do not need to remind you of the fallacies of a philosopher named Karl Marx. However, one seems notably worth noting: what if it is not the consciousness that determines the being, but rather the other way around? At least in the case of the German economy, signs indicate that the outlook is worse than the current situation.

Chancellor Friedrich Merz emphasized this during the end of the cabinet meeting in Neuhardenberg yesterday. He made a valid point, or rather three of them: more growth, more optimism, and more future-oriented initiatives.

Firstly, the economy grew by 0.3 percent in the second quarter, as corrected by the Statistical Office of Germany. This comes after a dip to minus 2.8 percent in the previous month, indicating a positive trend.

Secondly, the export sector's optimism is at its highest in four and a half years. The Ifo export confidence index rose to 9.6 points in August, up from minus 2.8 in July. The business climate index also improved to 88.8 points, up from 86.7.

Lastly, German startups managed to raise more capital than ever in the first half of 2023, with a total of 9.36 billion euros. This is significantly more than the previous record year of 2022, where startups raised 6.6 billion euros. This optimistic outlook is promising, but the chancellor noted that further implemented reforms are still necessary to maintain this growth.