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The uptick comes as its car manufacturing sector output increases 19.3% in August, following a drop of 9.2% in July
GERMAN industrial production rose more than expected in August, official data indicated on Tuesday (Oct 8), but experts said the rare bit of good news for Europe’s largest economy would not stave off recession fears.
Output rose by 2.9 per cent month on month, erasing July’s drop of 2.9 per cent, data from the federal statistics office Destatis showed.
Analysts surveyed by financial data company FactSet had expected a more modest increase of 0.8 per cent.
The rise was driven by a strong uptick in the volatile car manufacturing sector, with output up 19.3 per cent, following a fall of 9.2 per cent in July.
The August rebound did not signal the start of an industrial revival, the German economy ministry said, noting that sentiment indicators “remain gloomy”.
“The manufacturing sector in Germany is expected to remain subdued for now,” it added.
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Higher energy costs amid Russia’s war in Ukraine, weaker demand from key market China and an industrial slowdown have all weighed heavily on the German economy, which shrank in 2023.
Hopes that easing inflation would power a rebound this year are fading fast, and the economy ministry is expected to slash its outlook when it unveils the latest economic forecasts on Wednesday.
The Sueddeutsche newspaper has reported that it expects Berlin to predict that the economy will contract by 0.2 per cent in 2024.
The August rise in industrial production “fails to alleviate recession fears”, said ING economist Carsten Brzeski.
“The German economy finds itself in the same position as a year ago: The growth laggard of the eurozone with few signs of an imminent improvement.” AFP