Industrial production in Germany in May unexpectedly fell by 1.8%

The level of industrial production in Germany in May decreased by 1.8% by April, according to the Ministry of Economy of Germany, Bloomberg reports . European markets on Monday negatively reacted to this news.

In April, the German industrial production index, taking into account seasonality, decreased by 0.3%. Thus, the ascending trend that lasted almost a year has changed: in the last three months, production has been falling.

The Ministry of Economics believes that there are no grounds for pessimism: production has decreased only temporarily, largely due to the weekend of May 1. In annual terms, industrial production in May increased by 1.3%. GDP grew throughout the first quarter and added 2.5% in annual terms for this period.

At the same time, the number of production orders decreased, the business confidence index is at the lowest level in six months, and unemployment is also growing for two consecutive months.

European trading floors responded to bad news from Germany with a decrease. By 18:00 Moscow time, the London FTSE 100 fell by 0.51%, French CAC 40 - by 1%, German DAX - by 0.58%, Spanish IBEX 35 - by 0.91%.

Dow Jones and S&P 500 also decreased by about 0.3% in the first hours after the opening.

Forbes, at the same time, finds a positive moment in poor economic statistics from Germany: now the European Central Bank may reduce the base rate. Hope appears for quantitative mitigation similar to the one that the Fed to be in the United States. The ECB has saved the bet for a long time, the last time it was discussed last week, and the regulator decided to leave it without changes at 0.15%. A policy that does not provide for the injection of additional money into the economy and increase liquidity is beneficial to Germany, but negatively affects the economy of the EU peripheral countries suffering from deflation, Forbes authors explain.

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