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German economy stabilising

The downward trend in Germany’s economy appears to be slowing.

The downward trend in Germany’s economy appears to be slowing.

The level of output remained unchanged in April after a sharp fall during the first quarters, the German Federal Ministry of Economics and Technology says in an official statement. This adds to signs that the Europe’s biggest economy is recovering.

The output of capital goods increased by 2.5% over the month, the first increase recorded for six months. The sector benefited from a 15.4% rise in car and car part production.

The ministry says that positive impulses from the car industry were prompted by domestic and foreign economic stimulus packages.

Industrial production fell by 0.4% during the month, while the construction sector saw an increase of 7.6%.

Yesterday, the ministry said that industrial new orders increased by 3.3% in March. Foreign demand increased by 5.6% and domestic demand improved too, albeit with 1.1% at a lower rate.

Gabriel Stein, the chief international economist at Lombard Street Research, writes in his Daily Note that despite the “surprising positive” data, it is far too early to call a change trend for the German economy.

He says that “the best that can be said is that they imply a bottoming out in late 2009”.

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