"Hopes were not fulfilled": industrial production in Germany again with a minus sign

The volume of industrial production in Germany in July decreased by 2.4% compared to the previous month, which only increased the fears of experts in connection with a possible recession of the German economy. This was reported by the ARD TV channel with reference to data from the Federal Statistical Office of Germany.

Compared to July last year, the volume of industrial production also decreased by 5.3%. Thus, the indicators have reached the lowest values since the pandemic, and negative dynamics have been observed in ten of the last 14 quarters.

As follows from the published data, the new drop is due, in particular, to unfavorable trends in the automotive industry. Production volumes in one of the key sectors of the German economy decreased by 8.1% in July.

"Weak sales figures indicated that the German industry would not gain momentum in July either. On the contrary, the downward trend continued. These figures are spurring the discussion about the deindustrialization of Germany," commented Sirus de la, chief economist of the Hamburg Commercial Bank. Rubia.

The bright spot for the German economy in July was the growth of export volumes. According to the Federal Statistical Office, goods worth 130 billion euros were delivered to foreign markets, which is 1.7% more than in the first summer month.

"However, the overall picture remains gloomy: in the first seven months of this year, the volume of exports decreased by 1.1% compared to the same period in 2023. Imports decreased by 5.1%," the publication notes.

According to Klaus Wohlrabe, an expert at the Institute for Economic Research, German exporters currently cannot benefit from economic growth in other European countries.

"At the moment, they are not able to stimulate the positive dynamics of the German economy," he stressed.

Pessimistic expectations are expressed, among other things, in the revision of economic forecasts for 2024. In particular, the Institutes of Economic Research in Munich and Halle expect that the German economy will only stagnate. In turn, the Kiel Institute of World Economy predicts a 0.1% drop in GDP by the end of the year.

Experts also revised down their expectations. Instead of a small GDP growth of 0.4%, analysts now also expect stagnation at zero percent, the TV channel notes.

"The hopes for industrial recovery that we had at the beginning of the year have not been fulfilled," said Geraldine Dani—Knedlik from the German Institute for Economic Research in Berlin.