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-Michael Holstein, an economist at DZ Bank
After Wednesday's set of data from Germany, Mario Draghi will be under bigger pressure, as even Europe's powerhouse starts sending worrying signs. A couple of weeks earlier we stated that sanctions against Russia and counter measures from Vladimir Putin will have an uneven effect on European countries. It seems that Germany will suffer more than others.
Europe's largest economy is highly dependent on the exports and manufacturing production, hence, the country is not interested in any political tensions that can affect trade. Nevertheless, a slowdown in China and rising tension with Russia forced companies to reduce their spending and revise plans for the future. Factory orders, adjusted for seasonal swings and inflation, plunged 2.8% in March from February, when they posted a revised 0.9% increase. Economists forecasted that a report from the Federal Statistics Office will show a 0.3% increase. On a annual basis, orders jumped 1.5%, still missing expectations of 4.3% and slowing after a hike of 6.5% a month earlier. Despite a pickup in the sentiment among German purchasing managers, the outlook is getting gloomier. Economists claimed the resilience of the domestic economy is one of the main pillar of future growth. Meanwhile, internal orders fell 0.6% over the period, raising concerns about the faith of German manufacturers in their own country.