"After a period of deflating in the second half of last year, German industry has stabilized again"
- Carsten Brzeski, senior economist at ING Belgium SA
The industrial output in Europe's largest economy improved moderately in February, raising hopes that German economy is stabilizing after a contraction in the fourth quarter. According to the Economy Ministry, German production rose 0.5% from January, when it contracted 0.6%, beating analysts' expectations, which called for a 0.3% gain. On a yearly basis production tumbled 1.8% when adjusted for working days. German economy is expected to return to growth in the beginning of this year and rebound after a 0.6% contraction even despite deteriorating business sentiment and renewed concerns about the sovereign debt crisis and its impact on the 17-nation Euro economy, which is struggling to emerge from recession.
"After a period of deflating in the second half of last year, German industry has stabilized again," said Carsten Brzeski, senior economist at ING Belgium SA in Brussels. "The stabilization, however, is not automatically followed by a sharp rebound of industrial activity. The harsh winter weather has not only affected the construction sector but industry as a whole."
"Weak economic activity has extended into the early part of the year and a gradual recovery is projected for the second half of this year, subject to downside risks," ECB President Mario Draghi said.
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