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German industrial output drop raises recession concerns

German industrial output drop raises recession concerns

German industrial production reported a more than forecast drop in June, raising recession concerns in Europe’s biggest economy.

Output slipped 1.5 percent in June, following a downwardly revised of 0.1 percent increase in May, compared to analysts’ forecasts of 0.5 percent decrease. The drop was driven by weaker production of intermediate and capital goods.

“Industry remains in an economic downturn,” the German economy ministry said.

Today’s figures raised growth concerns after factory orders for June released on Tuesday showed a 2.5 percent rebound.

Manufacturing Purchasing Managers’ Index recorded the worst contraction in seven years in July, amidst the persisting trade conflicts.

The German government predicts the economy to expand just 0.5 percent this year, then accelerates to 1.5 percent in 2020.

Next week, eyes will focus on Germany’s preliminary gross domestic product figures for the second quarter.

As of 09:10 GMT, the euro traded lower at $1.1187, resuming its retreat from Tuesday’s peak of $1.1249, the highest level since July 19.

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