As per reports, the industrial output of Germany has risen 0.3% for the first time in after two consecutive monthly drops. The Statistics Office figures revealed favourable figures beating expectations that it will show a 0.1% drop. The rise has been widely attributed to the production of intermediate and capital goods, the Economy Ministry said. Manufacturing rose 0.7% whereas construction dropped by 1.5%, data revealed.
Germany's export-reliant sector is already in recession and has dragged on the economy as a whole which dropped in the second quarter. Economists forecast another slight economic slowdown in the July-September period. The doubts regarding Britain's departure from the European Union and global trade conflicts are beginning to hurt the German labour market which has been the key component of consumer-driven growth cycle as exports start to weaken. In another signal that slowdown in manufacturing will continue, the BGA trade association on October 8 revised its 2019 trade predictions. The association expects export growth of 0.5% this year from the previous estimate of 1.5%.
Reports suggested that July's output was revised up to a decline of 0.4% from a previous low of 0.6%. On October 7, data revealed that industrial orders fell more than expectations in August on account of weaker domestic demand. Chancellor Angela Merkel’s coalition government has shrugged any calls for a stimulus package to arrest the slowdown and put the economy back on track. The continuing economic weakness is an indication of the overall economic health of Eurozone which will be a pain for the European Central Bank which promised an indefinite stimulus to revive the economic giant's economy.
Meanwhile, Economists and German lobby groups have been urging Merkel to set aside her policy of no new debt and borrowing to fund a stimulus package for the economy. The pressure is likely to increase if the economy continues to head spiral downwards.
(With inputs from agencies)