Latest news with #FranziskaPalmas
Reuters
07-08-2025
- Business
- Reuters
German industrial output lowest since pandemic, exports exceed forecasts
Aug 7 (Reuters) - Germany's industrial output fell in June to its lowest level since the pandemic in 2020, extending last year's declines amid weakening foreign demand and increasing competition from China, while exports rose more than expected, data showed on Thursday. Industrial output dropped 1.9% month-on-month, the federal statistics office said, exceeding the 0.5% decline forecast in a Reuters poll of analysts. Production reached its lowest point since May 2020, when the pandemic triggered a sharp contraction, the office added. A three-month comparison showed a 1.0% decline in production in the second quarter, marking a return to levels last seen in the first half of 2020. It had previously seemed that German industrial production was rebounding this year after falling sharply in 2024, but the new data shows that the downward trend continued in 2025, Franziska Palmas, senior Europe economist at Capital Economics, said. "The medium term outlook for German industry remains poor as weak growth in both Europe and China, and rising competition from Chinese producers is likely to weigh heavily on demand for German industrial goods," Palmas added. The statistics office also revised the data for May to a 0.1% drop from the previous month, compared with a provisional figure of a 1.2% increase. The office attributed the revision to corrections from establishments in the automotive sector. Production was down 1% quarter-on-quarter in the second quarter, which means industry subtracted around 0.3% from GDP last quarter, Palmas said. Separately, German industrial orders fell unexpectedly by 1% in June, marking the second consecutive month of decline due to reduced foreign demand, data released on Wednesday showed. An unwelcome side effect of Thursday's figures could be a downward revision of the first GDP growth estimate for the second quarter, Carsten Brzeski, global head of macro at ING, said. Germany's economy contracted by 0.1% in the second quarter, the first estimate showed, as demand from the U.S. slowed following months of strong purchases in anticipation of tariffs. "Our previous view that the German economy would at least experience a cyclical rebound has come under enormous pressure," Brzeski said. "At face value, industry remains stuck in a very long bottoming out." German exports rose 0.8% month-on-month in June, surpassing the 0.5% increase predicted by analysts. Exports to European Union countries increased by 2.4%, while shipments to non-EU nations fell 1.2%, the statistics office said. Exports to the United States dropped 2.1% compared with May, marking a third consecutive monthly decline and reaching their lowest value since February 2022. Germany's export-oriented economy is expected to be badly affected by U.S. tariffs. The U.S. was Germany's biggest trading partner in 2024 with two-way goods trade totalling 253 billion euros. Imports rose by 4.2% on a calendar and seasonally adjusted basis compared with May, the office said. Germany's foreign trade surplus narrowed to 14.9 billion euros ($17.39 billion) in June, down from 18.5 billion euros in May and 20.3 billion euros in June of 2024. ($1 = 0.8566 euros)
Fast Company
30-07-2025
- Business
- Fast Company
Europe's economy grows just 0.1% in second quarter amid tariffs
Europe's economy barely grew in the April-June quarter as frantic earlier efforts to ship goods ahead of new U.S. tariffs went into reverse and output fell for the continent's biggest economy, Germany. Gross domestic product grew an anemic 0.1% compared to the previous quarter in the 20 countries that use the euro currency, the EU statistics agency Eurostat reported Wednesday. Growth was 1.4% over the same quarter a year ago. And prospects are mediocre for the coming months, given the 15% tariff, or import tax, imposed on European goods in the U.S. under the EU-U.S. trade deal announced Sunday. The higher tariff will burden European exports with higher costs to either be passed on to U.S. consumers or swallowed in the form of lower profits. The economy sagged after stronger than expected 0.6% growth in the first quarter, a figure inflated by companies trying to move product ahead of U.S. President Donald Trump's additional tariff onslaught that was announced April 2, two days after the first quarter ended. Output fell 0.1% in Germany and Italy, while growth of 0.3% in France was boosted by a rise in auto and aircraft inventories while domestic demand was otherwise stagnant. That left Spain as the only strong performer among the four largest eurozone economies at 0.7% 'With the 15% U.S. universal tariff likely to subtract around 0.2% from the region's GDP, growth is likely to remain weak in the rest of this year,' said Franziska Palmas, senior Europe economist at Capital Economics. Germany's economy remains roughly the same size as it was before the pandemic six years ago, as its export-dominated business sector struggles with multiple issues including stronger competition from China, a lack of skilled workers, higher energy prices, lagging infrastructure investment, and burdensome regulation and bureaucracy. Economist Palmas said that Germany 'is likely to be hit harder than other major economies by tariffs and continue to struggle this year' before increased government spending from the new government under Chancellor Friedrich Merz, aimed at making up the infrastructure gap, starts to boost the economy in 2026. On Wednesday, Germany's Cabinet approved a draft 2026 budget that foresees a second consecutive year of record government investment in priorities such as modernizing transport infrastructure, building homes, security and digitization. Spending is set to rise to 126.7 billion euros ($146.2 billion) next year from 115.7 billion euros in 2025. 'Our top priority is to secure jobs and ensure new economic strength,' Finance Minister Lars Klingbeil said.
30-07-2025
- Business
European economy sees growth of only 0.1% as scramble to get ahead of US tariffs goes into reverse
FRANKFURT, Germany -- Europe's economy barely grew in the April-June quarter as frantic earlier efforts to ship goods ahead of new U.S. tariffs went into reverse and output fell for the continent's biggest economy, Germany. Gross domestic product grew an anemic 0.1% compared to the previous quarter in the 20 countries that use the euro currency, the EU statistics agency Eurostat reported Wednesday. Growth was 1.4% over the same quarter a year ago. And prospects are mediocre for the coming months, given the 15% tariff, or import tax, imposed on European goods in the U.S. under the EU-U.S. trade deal announced Sunday. The higher tariff will burden European exports with higher costs to either be passed on to U.S. consumers or swallowed in the form of lower profits. The economy sagged after stronger than expected 0.6% growth in the first quarter, a figure inflated by companies trying to move product ahead of U.S. President Donald Trump's additional tariff onslaught that was announced April 2, two days after the first quarter ended. Output fell 0.1% in Germany and Italy, while growth of 0.3% in France was boosted by a rise in auto and aircraft inventories while domestic demand was otherwise stagnant. That left Spain as the only strong performer among the four largest eurozone economies at 0.7% 'With the 15% U.S. universal tariff likely to subtract around 0.2% from the region's GDP, growth is likely to remain weak in the rest of this year,' said Franziska Palmas, senior Europe economist at Capital Economics. Germany's economy remains roughly the same size as it was before the pandemic six years ago, as its export-dominated business sector struggles with multiple issues including stronger competition from China, a lack of skilled workers, higher energy prices, lagging infrastructure investment, and burdensome regulation and bureaucracy. Economist Palmas said that Germany "is likely to be hit harder than other major economies by tariffs and continue to struggle this year" before increased government spending from the new government under Chancellor Friedrich Merz, aimed at making up the infrastructure gap, starts to boost the economy in 2026. On Wednesday, Germany's Cabinet approved a draft 2026 budget that foresees a second consecutive year of record government investment in priorities such as modernizing transport infrastructure, building homes, security and digitization. Spending is set to rise to 126.7 billion euros ($146.2 billion) next year from 115.7 billion euros in 2025. 'Our top priority is to secure jobs and ensure new economic strength,' Finance Minister Lars Klingbeil said. ___
The Sun
30-07-2025
- Business
- The Sun
Eurozone economy grows 0.1% as US tariff deal looms
BRUSSELS: The eurozone economy showed unexpected resilience in the second quarter of 2025, growing by 0.1 percent despite escalating trade tensions with the US, according to official data released Wednesday. The slight expansion defied analyst expectations of stagnation, though economists warn that newly imposed tariffs could dampen future growth. The EU's statistics agency Eurostat reported mixed performances across the bloc. France, Europe's second-largest economy, grew by 0.3 percent, exceeding forecasts. Spain led with 0.7 percent growth, while Portugal expanded by 0.6 percent. However, Germany, the region's economic powerhouse, unexpectedly shrank by 0.1 percent, and Italy also contracted by the same margin. 'The eurozone economy showed resilience despite US trade volatility,' said ING Bank economist Bert Colijn. The growth follows a 0.6 percent expansion in Q1, though economists caution that Ireland's volatile data skewed earlier results. A recent US-EU trade deal, finalized Sunday, aims to prevent a full-blown trade war but imposes a 15 percent tariff on most EU exports. Analysts estimate this could reduce eurozone GDP by 0.2 percent. 'Growth is likely to remain weak for the rest of the year,' said Capital Economics' Franziska Palmas. France's Economy Minister Eric Lombard highlighted domestic resilience, while negotiators push for exemptions on alcohol tariffs. The deal's finer details, including which goods avoid duties, remain unresolved. - AFP
Yahoo
30-07-2025
- Business
- Yahoo
European economy sees growth of only 0.1% as scramble to get ahead of US tariffs goes into reverse
FRANKFURT, Germany (AP) — Europe's economy barely grew in the April-June quarter as frantic earlier efforts to ship goods ahead of new U.S. tariffs went into reverse and output fell for the continent's biggest economy, Germany. Gross domestic product grew an anemic 0.1% compared to the previous quarter in the 20 countries that use the euro currency, the EU statistics agency Eurostat reported Wednesday. Growth was 1.4% over the same quarter a year ago. And prospects are mediocre for the coming months, given the 15% tariff, or import tax, imposed on European goods in the U.S. under the EU-U.S. trade deal announced Sunday. The higher tariff will burden European exports with higher costs to either be passed on to U.S. consumers or swallowed in the form of lower profits. The economy sagged after stronger than expected 0.6% growth in the first quarter, a figure inflated by companies trying to move product ahead of U.S. President Donald Trump's additional tariff onslaught that was announced April 2, two days after the first quarter ended. Output fell 0.1% in Germany and Italy, while growth of 0.3% in France was boosted by a rise in auto and aircraft inventories while domestic demand was otherwise stagnant. That left Spain as the only strong performer among the four largest eurozone economies at 0.7% 'With the 15% U.S. universal tariff likely to subtract around 0.2% from the region's GDP, growth is likely to remain weak in the rest of this year,' said Franziska Palmas, senior Europe economist at Capital Economics. Germany's economy remains roughly the same size as it was before the pandemic six years ago, as its export-dominated business sector struggles with multiple issues including stronger competition from China, a lack of skilled workers, higher energy prices, lagging infrastructure investment, and burdensome regulation and bureaucracy. Economist Palmas said that Germany "is likely to be hit harder than other major economies by tariffs and continue to struggle this year" before increased government spending from the new government under Chancellor Friedrich Merz, aimed at making up the infrastructure gap, starts to boost the economy in 2026. On Wednesday, Germany's Cabinet approved a draft 2026 budget that foresees a second consecutive year of record government investment in priorities such as modernizing transport infrastructure, building homes, security and digitization. Spending is set to rise to 126.7 billion euros ($146.2 billion) next year from 115.7 billion euros in 2025. 'Our top priority is to secure jobs and ensure new economic strength,' Finance Minister Lars Klingbeil said. ___ Geir Moulson contributed from Berlin. Sign in to access your portfolio
