Bloomberg: Industrial production in Germany fell by almost 2.5 percent
Industrial production in Germany has fallen by 2.4 percent since June, according to Bloomberg.
One of the reasons for this dynamic is the situation in the automotive sector. In the second quarter, the German economy contracted by 0.1 percent. Thus, hopes that the years of stagnation are behind us have collapsed. The gloom is also increased by news of unprecedented closures of Volkswagen AG plants.
The Ifo Institute has downgraded its forecasts for this year and next. It expects growth to be zero in 2024 and only 0.9 percent in 2025. The Kiel Institute for World Economics is even more pessimistic. It predicts that gross domestic product will shrink by 0.1 percent this year.
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Experts called the new data on the rate of decline in industrial production a “cold shower”. The decline will continue, and the bottom is still far away. There are no signs of improvement. At the same time, there are concerns that the current problems of the German economy are structural, not temporary.
Earlier, the Financial Times reported that Germany could begin laying off workers in the manufacturing industry en masse. The reason is rising energy prices and a decline in exports. In 2024, the unemployment rate in Germany has already risen to six percent. Carsten Brzeski, chief economist at the Dutch bank ING, believes that the German labor market is “suffering and dying.”
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