Confidence returns to reality, German economic optimism dampened by sluggish industrial data

According to a report by Kasten Brzeski, Director of Global Macro Research at ING, the optimistic sentiment towards the German economy at the beginning of the year has given way to realism due to the improvement in the first quarter rise and confidence indicators. He said that the disappointing industrial production data in May, which fell by 2.5%, means that the entire economy may once again fall into negative rise in the second quarter. He pointed out that in order to avoid a negative rise in industrial output for the quarter, Germany needs to have a strong performance in June, with a rise of 5%. Brzeski stated that the current inventory levels are still close to record highs, and the number of orders has decreased, with industrial orders declining for the fifth consecutive month in May. Despite these discouraging data, the longer public holidays in May and strong rise in wages elsewhere should drive the recovery of expenditure.