Europe’s economic engine, Germany, is set to disclose the full extent of its industrial decline in 2023, marking a new post-pandemic low. A series of upcoming data releases, including monthly figures for exports, factory orders, and production, are anticipated to reveal a downturn in December, signaling a significant setback for the region’s largest economy. The industrial giant, Siemens AG, reporting earnings soon, is expected to shed light on the manufacturing malaise overshadowing Germany, complicating matters for Chancellor Olaf Scholz amid coalition disarray.
Despite successfully passing a new budget for 2024, Germany faces the challenge of managing without a deficit in 2025, following a court ruling against off-balance sheet funding. Bloomberg Economics notes that the country, flirting with recession for several quarters, may have narrowly avoided it so far, with industrial weakness likely driving the GDP contraction in the final quarter of 2023.
Chancellor Scholz, dealing with internal political tensions, may welcome the distraction of foreign policy matters during his meeting with President Joe Biden at the White House. However, the looming economic concerns are hard to ignore, especially as Finance Minister Christian Lindner and Bundesbank chief Joachim Nagel address the public in Frankfurt and Paris, respectively. The fate of Germany’s economy remains a pressing topic amidst the challenges faced by the three-party alliance.
