Germany’s economy ministry said the outlook is showing signs of improvement even if a mild recession with two consecutive quarters of contraction remains possible.
(Bloomberg) — Germany’s economy ministry said the outlook is showing signs of improvement even if a mild recession with two consecutive quarters of contraction remains possible.
“The development of current economic and leading indicators at the beginning of the year gives cause for cautious optimism,” officials said in a monthly report released on Thursday in Berlin. They cited data including industrial production, factory orders and exports to support that view.
Those reports suggested a better-than-expected performance for manufacturing in January in Europe’s biggest economy. Whether that persists during the full quarter and how consumers fare remains in doubt.
“A technical recession with two negative quarterly rates in succession can no longer be ruled out,” the ministry said, adding that “a broad and prolonged downturn is not currently expected.”
Officials noted that business expectations as measured by the Munich-based Ifo institute have shown a marked improvement, a good omen for manufacturing.
“Pessimism is also fading in the other major sectors of the economy,” they said.
–With assistance from Iain Rogers.
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