German economy minister not anxious about China market turmoil

German business confidence posted a surprise gain in August as executives in Europe’s biggest economy defied renewed uncertainty surrounding Greece as well as concerns about the threat posed to global growth by a slowdown in China.

The German government is sticking to its forecasts for growth of 1.8 percent both this year and next, a senior official at the Economy Ministry, Jeromin Zettelmeyer, told Reuters.

Business sentiment in Germany remained unexpectedly robust in August, the Munich-based Ifo think tank said Tuesday. Battered mining and technology stocks were the big winners from China’s move to support its stuttering economy and a plunging stock market that has sent shockwaves around the globe.

The budget surplus came in at 1.4 per of GDP cent during the first half of the year with the country’s federal, state and regional governments continuing “to benefit from a positive development of employment and economy along with moderate spending policies”, the statistics office said.

Market observers have been watching China anxiously for weeks as the country suffers an abrupt slowdown in economic growth. France and Germany yesterday shrugged off a rout in world markets over China’s slowing growth, with French President Francois Hollande saying that the global economy was “strong enough” to withstand any such downturn.

London’s FTSE and Germany’s DAX were also down 2.5 percent and 3.24 percent, respectively, in early trading after several Chinese indices fell by around eight percent overnight.

“Exports to China are important, but only account for 6.6 per cent of total German exports”.

“We are on track”, said Zettelmeyer. Gross domestic product rose 0.4 percent quarter-on-quarter, faster than the 0.3 percent expansion seen in the first three months of the year, final data from Destatis showed. Share prices are falling because investors are selling in the fear that if they don’t, the prices will fall further and they’ll lose more money as the slowing Chinese economy hits US and European companies. “Here there are major question marks, as developments in China and other emerging markets show”.

Market watchers noted that just as in China, the lion’s share of 2015’s increase in value on the index of 30 leading German companies had now been wiped out.

Around half of Germany’s 30 blue-chip companies reported consensus-beating financial results for April-June.