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| Germany faces ‘exceptionally difficult years’ - study | |
| (about 2 hours later) | |
| The country risks a prolonged recession, economists have warned | |
| German industrial production unexpectedly fell in May, raising fears of a prolonged downturn in the EU's top economy, data from the federal statistics agency Destatis showed on Friday. | German industrial production unexpectedly fell in May, raising fears of a prolonged downturn in the EU's top economy, data from the federal statistics agency Destatis showed on Friday. |
| Output slipped by 0.2% compared to the previous month, as a 13% drop in pharmaceuticals outweighed increased vehicle production. | Output slipped by 0.2% compared to the previous month, as a 13% drop in pharmaceuticals outweighed increased vehicle production. |
| Chief economist at ING, Carsten Brzeski, warned the latest data indicated that "German industry is still stuck in stagnation." He pointed to a "toxic combination" of poor outlook, a lack of orders and the need to build up inventories further amid structural factors such as the conflict in Ukraine and the transition to green energy. | Chief economist at ING, Carsten Brzeski, warned the latest data indicated that "German industry is still stuck in stagnation." He pointed to a "toxic combination" of poor outlook, a lack of orders and the need to build up inventories further amid structural factors such as the conflict in Ukraine and the transition to green energy. |
| "The country's international competitiveness has already deteriorated in recent years and is likely to deteriorate further," Brzeski said. | "The country's international competitiveness has already deteriorated in recent years and is likely to deteriorate further," Brzeski said. |
| German manufacturing needs an activity surge in June to avoid an extension of the recession, he added, as May's figure was affected in particular by a 7% decline in the energy sector. | German manufacturing needs an activity surge in June to avoid an extension of the recession, he added, as May's figure was affected in particular by a 7% decline in the energy sector. |
| Meanwhile the latest report suggests Germany's manufacturing slump may be enduring. | Meanwhile the latest report suggests Germany's manufacturing slump may be enduring. |
| "Data for the first two months of the second quarter have not taken away the risk of a further contraction of the German economy," Brzeski noted. | "Data for the first two months of the second quarter have not taken away the risk of a further contraction of the German economy," Brzeski noted. |
| The economist said the current decline marks the first time since 2008 that German economy shrank for more than two consecutive quarters. | The economist said the current decline marks the first time since 2008 that German economy shrank for more than two consecutive quarters. |
| The country's GDP fell by 0.3% in the first quarter of 2023, after a 0.5% contraction in the last quarter of 2022. | The country's GDP fell by 0.3% in the first quarter of 2023, after a 0.5% contraction in the last quarter of 2022. |
| The Bundesbank earlier predicted that the recession in Germany would end soon, expecting a return to growth by the end of the year, but economists warn of a further decline. | The Bundesbank earlier predicted that the recession in Germany would end soon, expecting a return to growth by the end of the year, but economists warn of a further decline. |
| "We may just see stagnation in the second quarter, but much more likely a renewed decline in economic output," LBBW bank analyst Jens-Oliver Niklasch said. | "We may just see stagnation in the second quarter, but much more likely a renewed decline in economic output," LBBW bank analyst Jens-Oliver Niklasch said. |
| For more stories on economy & finance visit RT's business section | For more stories on economy & finance visit RT's business section |