German industrial output up 2%

German industrial production rose 2.0% in January from the previous month, according to data from the Federal Statistical Office. This was better than the expectations of analysts polled by Reuters, who had expected a 1.5% increase.

Commerzbank chief economist Ralph Solven noted that industrial production in January was above the average performance in the fourth quarter, raising hopes that production will stabilize at least in the first quarter.

These developments enhance the chances of a slight recovery in the German economy at the start of the year, Ralph Solven added.

Germany’s gross domestic product fell by 0.2% in the fourth quarter compared to the previous three-month period.

After revising the preliminary results, industrial production in December 2024 fell by 1.5% compared to November, instead of the 2.4% decline previously reported.

Exports fell sharply by 2.5% in January from the previous month, data from the Federal Statistical Office showed on Monday, compared with expectations for a 0.5% increase. CNBC

The data showed that this reflects the challenges facing the next government in reviving the euro zone’s largest economy amid geopolitical uncertainty.

In contrast, imports rose by 1.2% from the previous month, according to the data.

Last year, Germany was the only G7 country to contract for a second year in a row.

Exports to EU countries fell by 4.2% during the month, while exports to countries outside the EU fell by 0.4%.

Although the United States was the main destination for German exports in January, the volume of exports to it fell by 4.2% compared to December 2024.

“This still reflects a discouraging picture for a country known as a major industrial power,” said Carsten Brzeski, head of global macroeconomics at ING.