The risk of a recession in the United States is receding as German industry appears to have bottomed out. Good news for the French economy since these two countries are the first customers of France.

The lull on the trade war front and the clear British vote in December for Brexit have eased uncertainties over the global economy.

“The worst is probably behind us”. By pronouncing this sentence, Georges Dib, economist at the credit insurer Euler Hermes, sums up what many of his colleagues think today. The result of the UK elections on 12 December and the victory of the Conservatives clarify the future Brexit. And the temporary lull of the Sino-American trade war with the agreement reached between the two parties, at least until the American presidential election of 2020 removes the prospect of a souring of relations between the two powers. “We are witnessing a certain stabilization, in particular thanks to the de-escalation of the trade war”, confirms Gilles Moëc, chief economist of Axa Investment managers.

No imminent recession in the United States

Consequently, the risks of economic recession in the United States are no longer relevant. “There is no imminent recession in the United States”, considers Anton Brender, chief economist at Candriam. “The weight of the debt of American companies is out of proportion to what we experienced during previous crises because the interest charge remains at a reasonable level thanks to the fall in interest rates. At the same time, the US economy creates 150,000 jobs every month and wages increase by 3% per year ”, he explains.

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“Usually, at the end of the cycle, the Federal Reserve raises its rates, which takes oxygen away from weaker businesses and households. There, it did the opposite by lowering them, which delays the recession ”, judge for his part Samy Chaar, chief economist of the Swiss bank Lombard Odier. Likewise, to alleviate the uncertainties, the European Central Bank has followed the same strategy in order to support the economy of the Old Continent. In short, the great crisis is not for now.

This is good news for the global economy. Uncertainties over Brexit and the trade war led to a slowdown in business investment in most countries in 2019.

German slowdown

German industry in particular has been hit hard by trade tensions and the slowdown in the Chinese economy. But here again, if the structural problems of German industry are far from being resolved, in terms of the economy the fall seems at least in the short term to be contained. The Ifo Institute forecasts Germany’s growth of 0.5% in 2019 but 1.1% in 2020, close to French performance.

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However, Germany remains the first commercial partner of France and the United States is our second customer. Over the past twelve months, French exports of goods across the Rhine have reached 70 billion euros and those to the United States, which have increased significantly for two years, 42 billion euros. French exports to the United States and Germany represent 5% of French GDP. The fact that fears of a US recession and a prolonged slump in the German economy are receding can only be beneficial to France.