Berlin’s Ministry of Economic Affairs has confirmed the EU member state is battling its own financial crisis with production recorded at the same all-time low as it was 11 years ago. The Federal Statistical Office today announced total production in December was 3.5 percent below the previous month’s level, the sharpest decline since the historic 2009 crash. Analysts had expected a slight decline of 0.2 percent on average.
Germany’s Federal Ministry of Economics said: “The recent weak development in production and incoming orders indicates that the economic downturn in industry has not yet been overcome.”
They said despite the German economy battling to stay afloat, they expect things to pick up in the summer.
It comes a Germany – the EU’s biggest funder – remains on the brink of recession.
The German economy has particularly been struck by US and China trade tensions and Brexit.
There is also tension with climate change measures impacting the country’s traditional auto industry.
GDP figures for the whole economy are due next week and a contraction could prompt renewed calls for fiscal stimulus.
Over the last 18 months, Germany has narrowly avoided a recession twice, but little has changed in its economic approach.
There is concern the German crisis could spread across the eurozone, as there were bad economic figures across the region.
France saw a 2.8 percent drop in industrial output in December, while Spain posted a 1.4 percent decline – both far worse than economists had anticipated.
The Netherlands added to the gloom, with manufacturing shrinking 1.7 percent, the most since 2018.
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Last week, US President Donald Trump revived his threat of tariffs on European imports.
Marcel Fratzscher, President of the DIW (German Institute for Economic Research, told CNBC: “I am pessimistic about the German outlook because Germany could experience something like the perfect storm.”
He said that there are “so many risks,” such as global slowdown, the coronavirus, geopolitical conflicts, a weak financial sector in Europe and Brexit, that the German government must take “immediate action”.
Additional reporting by Monika Pallenberg.