Germany's growth sluggish despite stabilisation: The Conference Board

The Conference Board Leading Economic Index (LEI) for Germany inched up by 0.1 per cent in December to 87.3 (2016=100). This followed a 0.2 per cent decline in November, which was revised upwards from an initial estimated drop of 0.5 per cent.

Over the second half of 2024 (H2 2024), the LEI contracted by 0.2 per cent, marking a significant improvement from the 2.2 per cent contraction recorded in the first half (H1) of the year.

Meanwhile, the Conference Board Coincident Economic Index (CEI) for Germany, which reflects current economic conditions, declined by 0.4 per cent in December to 103.2 (2016=100). This drop follows a 0.1 per cent rise in November.

The CEI fell by 0.5 per cent during the latter half of 2024, reversing the slight 0.1 per cent increase seen in the first six months of the year.

“The LEI for Germany showed a slight improvement in December 2024. The gain was driven by positive contributions from stock prices, consumer confidence, and new residential construction orders while the yield spread continued to weigh on the index and new orders for investment goods weakened for the second consecutive month. The Index seems to have stabilised in the second half of 2024 after over a year of decline,” said Allen Li, associate economist at The Conference Board, in a release.

“As a result, the semi and annual growths of the Germany LEI, while still negative, have recovered from the early 2024 lows, suggesting lessened headwinds to economic growth ahead. All considered, after a contraction of 0.2 per cent in 2024, The Conference Board currently projects a sluggish recovery in German with real GDP reaching only 0.4 per cent for 2025, as political and trade uncertainties persist in the near term,” Li added.

ALCHEMPro News Desk (HU)