The o The German economy received an unexpected boost in the first quarter, likely due to industry and construction. However, there is still no evidence of sustained improvement in the overall economy. Demand for industrial products domestically and abroad remains weak and continues to decline. Higher interest rates and economic uncertainty are holding back investment, while households are still hesitant to spend.
It is uncertain whether the increase in economic output will continue into the second quarter. Germany is currently considered the “sick man of Europe” due to weak demand conditions and lackluster consumption activity. This perception has not changed as the second quarter begins. These issues may prompt the ECB to consider loosening policy sooner rather than later.