The decline of the German economy slowed in November

Although Germany’s composite Purchasing Managers’ Index (PMI) rose 1.2 points to 47.1 points in November, it remained below 50 points, indicating contraction, for five consecutive months.

The main November PMI data from the HCOB (Hamburg Commercial Bank), prepared by S&P Global, has been announced. Consequently, the composite PMI, which was 45.9 in October, remained above expectations and rose to 47.1 in November.

Thus, the index remained below 50 points, indicating a contraction, for five consecutive months. The expectation was for the index to rise to 46.5.

The PMI for the services sector in the country increased from 48.2 to 48.7 in November.

While the manufacturing PMI rose from 39.1 to 39.8 in the month in question, it remained in the contraction zone.

‘THERE IS A LITTLE HOPE’

Cyrus de la Rubia, chief economist at the Commercial Bank of Hamburg, assesses the issue: “Christmas is approaching and there is hope for the German economy. Although we are still in the recession zone, the pace of the deceleration has visibly slowed. “The strong increase in almost all sub-indices is particularly encouraging.” he said.

La Rubia stated that a return to the PMI growth zone (above 50 points) is a reasonable possibility and will potentially occur in the first half of the year, and added: “There is a positive evolution in the manufacturing sector due to the decrease in the fall in new orders. “This is supported by both domestic and international orders.” He made his assessment.

Ciro de la Rubia stated that they expect a contraction of the German economy of 0.7 percent in the fourth quarter of the year. Previously, this expectation was 0.9 percent.

In PMI data, above 50 points indicates growth, while below 50 points indicates contraction.

The manufacturing and service sectors account for more than two-thirds of the German economy.

DANGER OF RECESSION

The country’s economy contracted 0.1 percent in the third quarter of the year compared to the previous quarter due to weak purchasing power and high interest rates. If the German economy contracts in the final quarter, it will contract for two consecutive negative quarters and enter a technical recession.

On October 11, the government updated its growth expectation, which it had previously announced at 0.4 percent for this year, to -0.4 percent due to the stagnation of the global economy.

The International Monetary Fund also reduced its growth expectation for Germany from -0.3 percent to -0.5 percent, reporting that Germany would be the only developed country to contract this year. (AA)