- Unexpected boost from industry and construction likely led to expansion in Q1
- But there is still no evidence of sustained improvement for the German economy
- Demand for industrial products domestically and abroad remains weak, continues to decline
- Higher rates and economic uncertainty are holding back investment
- Households are also still hesitant to spend
- It is unclear that the increase in economic output will continue in Q2
Germany continues to be the sick man of Europe at the moment and that perception has not changed to start the second quarter this year. Weak demand conditions and poor consumption activity are the two main problems. And that in general is a contributive factor for the ECB to look towards loosening policy sooner rather than later.
