ECB and Eurozone

Eurozone Industrial Production Decline Due to Domestic Factors: ECB

Posted Monday, September 23, 2019 by
Arslan Butt • 1 min read

According to the ECB, the decline in Eurozone industrial production’s performance has been driven mainly by domestic factors. While global developments, particularly the US-China trade war, drove down industrial production in the Eurozone during H1 2018, domestic factors especially in Germany have been behind this decline since at least July last year.

The ECB made these observations in a recent Economic Bulletin, adding that domestic factors were responsible for around 63% of the fall in industrial production in the Euro area, while global trade tensions accounted for around 37% of the decline. The central bank highlighted challenges experienced by the German auto industry in conforming with new emissions testing norms as one of the domestic factors. This caused disruptions in supply, which had an adverse impact on industrial production.

The ECB also remarked, “The more recent increase in the negative contribution of domestic factors to euro area industrial production growth is due to lower industrial output growth in Germany, possibly linked to the weaker consumption growth recorded in this country in the second quarter of 2019”.

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