From Volkswagen to China: What Might Derail Germany’s Growth

Germany’s trademark industrial prowess has been called into question by Volkswagen AG’s emission scandal, the slowdown in China and other emerging markets is threatening exports, and the influx of migrants is set to put a strain on the nation’s finances. This week, a smattering of economic data will give a hint on whether the largest economy in the euro area can sail through the headwinds that have accumulated in recent weeks or is at risk of running aground.

With the euro region’s upswing depending on Germany’s economic health, European Central Bank President Mario Draghi is watching closely for challenges ahead. A renewed slide in energy prices has countered the effects of his quantitative-easing program, pushing the inflation rate back below zero and triggering a debate about the need for more stimulus that is likely to intensify if Germany’s recovery falters.