Zürcher Nachrichten - Industrial slump leaves Germany on brink of recession

EUR -
AED 3.973743
AFN 72.902233
ALL 98.375571
AMD 417.79432
ANG 1.945844
AOA 986.133506
ARS 1068.267744
AUD 1.653032
AWG 1.947377
AZN 1.839693
BAM 1.955305
BBD 2.179969
BDT 129.017365
BGN 1.95627
BHD 0.407693
BIF 3138.035244
BMD 1.081876
BND 1.431051
BOB 7.460113
BRL 6.233336
BSD 1.079637
BTN 90.755044
BWP 14.492602
BYN 3.533306
BYR 21204.776285
BZD 2.17627
CAD 1.505853
CDF 3148.259798
CHF 0.938418
CLF 0.036956
CLP 1019.721489
CNY 7.717785
CNH 7.702197
COP 4719.155418
CRC 554.25724
CUC 1.081876
CUP 28.669723
CVE 110.237116
CZK 25.353879
DJF 192.263144
DKK 7.460507
DOP 65.024454
DZD 144.297528
EGP 52.717527
ERN 16.228145
ETB 129.016558
FJD 2.467322
FKP 0.827818
GBP 0.832012
GEL 2.953711
GGP 0.827818
GHS 17.544562
GIP 0.827818
GMD 75.193377
GNF 9311.730682
GTQ 8.345889
GYD 225.882863
HKD 8.407061
HNL 27.235363
HRK 7.453079
HTG 142.285324
HUF 405.477492
IDR 17028.300858
ILS 4.035942
IMP 0.827818
INR 90.973088
IQD 1414.355314
IRR 45552.402923
ISK 148.498191
JEP 0.827818
JMD 170.806005
JOD 0.766941
JPY 165.872743
KES 139.561795
KGS 92.836702
KHR 4388.930395
KMF 492.741184
KPW 973.688463
KRW 1496.656931
KWD 0.331692
KYD 0.899781
KZT 529.261016
LAK 23669.01296
LBP 96736.830569
LKR 317.0598
LRD 207.301396
LSL 19.12304
LTL 3.1945
LVL 0.654416
LYD 5.21173
MAD 10.651106
MDL 19.353015
MGA 4990.82984
MKD 61.599419
MMK 3513.892154
MNT 3676.215837
MOP 8.639815
MRU 42.689202
MUR 49.885388
MVR 16.617965
MWK 1872.161049
MXN 21.700092
MYR 4.753221
MZN 69.142553
NAD 19.12304
NGN 1775.975519
NIO 39.730318
NOK 11.859675
NPR 145.209612
NZD 1.814788
OMR 0.416517
PAB 1.079627
PEN 4.06381
PGK 4.323946
PHP 63.080941
PKR 299.874733
PLN 4.338975
PYG 8594.905376
QAR 3.936404
RON 4.975118
RSD 117.105565
RUB 105.443931
RWF 1468.321804
SAR 4.063125
SBD 9.015862
SCR 15.191686
SDG 650.753943
SEK 11.51203
SGD 1.433492
SHP 0.827818
SLE 24.559198
SLL 22686.402474
SOS 617.041069
SRD 37.138645
STD 22392.65596
SVC 9.446698
SYP 2718.247053
SZL 19.12825
THB 36.545776
TJS 11.498292
TMT 3.786567
TND 3.344254
TOP 2.533864
TRY 37.097237
TTD 7.317149
TWD 34.666025
TZS 2942.70341
UAH 44.65603
UGX 3956.999083
USD 1.081876
UYU 44.928635
UZS 13803.508424
VEF 3919153.881248
VES 45.625543
VND 27406.63241
VUV 128.442565
WST 3.030535
XAF 655.788089
XAG 0.032073
XAU 0.000398
XCD 2.923825
XDR 0.81151
XOF 655.797179
XPF 119.331742
YER 270.820683
ZAR 19.12303
ZMK 9738.24388
ZMW 28.745994
ZWL 348.36374
  • CMSD

    -0.0400

    24.84

    -0.16%

  • JRI

    -0.0900

    12.98

    -0.69%

  • SCS

    -0.3800

    12.21

    -3.11%

  • BCE

    -0.2300

    32.46

    -0.71%

  • BCC

    -6.9800

    131.64

    -5.3%

  • GSK

    0.2900

    38.17

    +0.76%

  • CMSC

    -0.1600

    24.57

    -0.65%

  • AZN

    -0.7900

    75.22

    -1.05%

  • NGG

    -0.8800

    65.12

    -1.35%

  • RIO

    0.4000

    66.58

    +0.6%

  • RBGPF

    62.3500

    62.35

    +100%

  • BTI

    -0.4500

    34.46

    -1.31%

  • RYCEF

    0.0400

    7.25

    +0.55%

  • RELX

    -0.2500

    47.91

    -0.52%

  • BP

    -1.6900

    29.36

    -5.76%

  • VOD

    -0.2600

    9.28

    -2.8%

Industrial slump leaves Germany on brink of recession
Industrial slump leaves Germany on brink of recession / Photo: JENS SCHLUETER - AFP/File

Industrial slump leaves Germany on brink of recession

German output likely contracted again in the third quarter as an industrial slump drags on, official data is expected to show Wednesday, tipping Europe's largest economy into recession.

Text size:

Federal statistics agency Destatis will unveil its quarterly GDP estimate at 10am (0900 GMT).

The economy ministry has said it expects "a renewed slight decline" after gross domestic product already shrank by 0.1 percent in the second quarter.

A technical recession is defined as two consecutive quarters of contraction.

"The German economy is unlikely to have emerged from its weak phase in the third quarter," the ministry said in its autumn forecasts this month.

Analysts surveyed by FactSet were narrowly more upbeat, predicting a quarter-on-quarter stagnation.

Other major European economies were also set to publish third-quarter GDP data Wednesday. The figure for the eurozone as a whole will likely be weighed down by Germany's performance.

Traditionally a European growth engine, Germany has been hit hard by elevated energy costs in the wake of Russia's war in Ukraine, sluggish domestic consumption following a period of high inflation and cooling export demand.

The headwinds have taken their toll on the country's crucial industrial sector, which accounts for around 20 percent of German GDP.

"The manufacturing sector is running out of orders," the BDI federation of German industries said in its latest report.

The BDI now sees factory output falling by three percent year-on-year in 2024, noting that this would be "the third consecutive drop".

The downturn has been particularly visible in Germany's flagship auto sector.

Volkswagen is considering closing at least three German plants and axing tens of thousands of jobs, labour leaders told employees this week, as Europe's biggest car manufacturer confronts stiff Chinese competition especially in electric vehicles.

Volkswagen, BMW and Mercedes-Benz all lowered their annual outlook in September, citing falling Chinese demand.

- Government under pressure -

Long-standing structural challenges are adding to Germany's woes, including complex bureaucracy, under-investment in infrastructure, an ageing workforce and a costly green energy transition.

Pressure is mounting on Chancellor Olaf Scholz's government to take action, but the fragile three-party coalition is at odds over how best to turn the economic tide.

Economy Minister Robert Habeck, from the Greens party, last week proposed a multi-billion-euro investment bonanza to help German business.

But the idea was quickly shot down by hawkish Finance Minister Christian Lindner.

Lindner, from the liberal FDP, is a staunch defender of Germany's constitutionally enshrined debt limits and has resisted calls from other coalition members to loosen the rules.

The International Monetary Fund has waded in on the debate, with its European head Alfred Kammer on Tuesday saying Germany needed structural reforms as well as public infrastructure investments.

To achieve this, he told the Sueddeutsche newspaper, "the debt brake can be relaxed".

Germany was the only major advanced economy to shrink in 2023 and the government expects another mild contraction in 2024.

But it sees a recovery starting in 2025, when easing inflation and higher wages are expected to boost consumption.

German inflation slowed to 1.6 percent in September, the lowest level since 2021. October's inflation figure is due later on Wednesday.

D.Graf--NZN