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The BBC's Patrick Bartlett in Frankfurt
"The ECB appears determined to stick to its 'wait-and-see' policy"
 real 28k

Wednesday, 9 May, 2001, 13:46 GMT 14:46 UK
Sharp jolt for German economy
Cranes on Berlin's skyline
The construction industry showed the greatest fall
The economic outlook for Germany has worsened again as the biggest economy in the eurozone reports a sharp fall in industrial output.

Data published by the Finance Ministry showed industrial output fell 3.7% in March after having expanded by 0.6% in February. Analysts had been expecting a 1.0% fall.

The data is the latest figure in a recent wave of weak economic statistics, including manufacturing orders and unemployment.

The fall was mainly due to a 13.6% drop in the construction sector as well as the mining sector, which fell by 3.3%, and the manufacturing sector which declined by 3.0%.

Interest rate impact

The figures are expected to increase pressure on the European Central Bank (ECB) to cut its interest rates as the German economy slows.

The ECB is due to meet on Thursday but few economists are expecting a cut to rate levels that have been unchanged at 4.75% since October.

The ECB is the only major central bank in the world not to have loosened its monetary grip in response to the deteriorating global economic conditions.

The US Federal Reserve has cut key rates four times this year to try prevent the economy falling into recession.

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See also:

08 May 01 | Business
German labour market stalls
07 May 01 | Business
'Made in Germany' orders down 4.4%
23 Apr 01 | Business
Gloom hits German businesses
27 Apr 01 | Business
French economy outshines Germany
12 Apr 01 | Business
German retail sales fall
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