- Economy Ministry
German factory orders dropped for a second month in a row in January amid global slowdown and moribund domestic pricing power. Orders declined a seasonally adjusted 0.1% from December, when they dropped a revised 0.2% compared with the previously reported decrease of 0.7%, according to the Economy Ministry. While domestic orders fell 1.6% in January, foreign orders climbed 1.0%, with booking from the Euro zone surging 7.5%. While the German economy is benefitting from all-time low unemployment that is underpinning domestic demand, corporate confidence has been hit by market turbulence and concerns that Euro bloc's recovery might wane. Exporters are struggling with a China-driven slowdown in emerging markets.
Against all the odds, the Euro zone's number one economy continue to grow, reaching the same level as registered in the third quarter of 2015. Germany's economy expanded 0.3% during the December quarter, while the annual non-seasonally adjusted growth rate was 2.1%, the highest reading since the first quarter of 2014. The real GDP is predicted to increase by 1.8% in 2016 and 2017, according to the European Commission's latest 2016 Winter Economic forecast. The German economy will benefit from a robust labour market, low oil prices, additional public spending, as well as favourable financing conditions.
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