Indonesian headline inflation decelerates further in July, monetary policy stance to remain accommodative
German headline inflation rate falls below zero in July, likely to return to positive territory in August
German new orders rebound strongly in May, GDP likely to fall sharply in 2020
German new orders grew strongly in May, as anticipated, following their slump in March and April. On a month-on-month basis, new orders rose 10.4 percent, as compared with consensus expectations of 15.4 percent. The largest rise was recorded from the euro zone at just under 21 percent, while orders from outside the euro area were disappointing with a rise of only 2 percent. Domestic orders rose by just under 9 percent.
The strong May rise in orders was not sufficient to counter the previous slump in March and April. In fact, order were still over 30 percent below than in February, the last month without a marked corona effect. This implies that industrial production will also take a long time to return to its initial level, said Commerzbank in a research report. This is not changed by the fact that real industrial sales grew over 10 percent in April, implying that a similar rise in production figures is likely.
In spite of the rebound in May and the further rise seen in June, industrial production in the second quarter is expected to have been some 17 percent below the average for the first three months. This would mean that the fall would be even steeper than in the first quarter of 2009, when production was down by nearly 12 percent in the wake of the financial crisis.
“However, this sharper decline is primarily due to the fact that the slump was faster. The scale of the decline is quite comparable, and this time there are signs of a faster recovery, at least for the first few months. Although real GDP is therefore likely to fall more sharply this year than in 2009, it is not yet clear whether the current crisis will also be more severe for manufacturing than that of 2008/2009”, added Commerzbank.