Industrial production in Germany rose below expectations in April
The German Federal Statistical Office (Destatis) has announced provisional data on industrial production for April.
As a result, seasonally and calendar adjusted industrial production rose 0.3 percent in April from the previous month, below analysts’ forecasts. The expectation was that industrial production would increase by 0.6 percent.
Industrial production rose 1.6 percent compared to April 2022. The fall in industrial production in March, which was announced at 3.4 percent, was also revised to 2.1 percent.
ENERGY PRODUCTION DECREASED 1.5 PERCENT
The data revealed that industrial production, excluding power and construction, rose 0.1 percent in April from the previous month. In said period, the production of capital goods and intermediate goods fell 0.3 percent and industrial production 0.2 percent.
Compared with the previous month, consumer goods production increased 1.5 percent in April, while energy production decreased 1.5 percent.
‘THE RESESSION MAY CONTINUE IN THE SECOND QUARTER’
Carsten Brzeski, head of ING’s Global Macro Research and Germany’s chief economist, said the 0.3 percent increase in industrial production in April will bring no relief to the German economy. “Unless there is a significant recovery in economic activity, the recession in the German economy could continue into the second quarter,” he said.
Alexander Krüger, chief economist at Hauck Aufhauser Lampe Privatbank, said: “Although production is increasing, growth is but a drop in the ocean. Compared to the situation before the Covid-19 outbreak, there is still a long way to go.
THE ECONOMY ENTERS A TECHNICAL RECESSION
The German economy had technically entered a recession, contracting 0.3 percent in the first quarter of this year due to the impact of unusually high inflation and rising interest rates on consumer spending.
The economy contracted 0.5 percent in the last quarter of last year.
Although the bottlenecks that arose during the Covid-19 epidemic have eased, the country’s economy is negatively affected by the stagnation of demand due to the rise in interest rates, the decrease in confidence in the economy and the decrease in consumer purchasing power. in an environment of unusually high inflation.
The German government expects 0.4 percent growth in the economy this year.
Leading German economic institutes predict the country’s economy will grow 0.3 percent this year. (AA)