German Economic Decline Impacts Hungarian Suppliers

Germany’s economy is facing significant challenges, with recent reports indicating a decline in factory orders that suggests a continuation of its economic woes, writes Világgazdaság. According to an article Hungary Today published earlier, the combi

By: hungarytoday.hu

Oct 08 2024
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German Economic Decline Impact

Germany’s economy is facing significant challenges, with recent reports indicating a decline in factory orders that suggests a continuation of its economic woes, writes Világgazdaság.

According to an article Hungary Today published earlier, the combination of high inflation, rising energy prices, and a weakening export market has cast a long shadow over the Hungarian economy, given the close economic ties between the two nations.

In August, German factory orders fell by 5.8% year-on-year, surpassing the consensus forecast of a 2% decline.

This drop represents the steepest decline since January, with capital goods orders decreasing by 8.6%, intermediate goods by 2.2%, and consumer goods by 0.9%. Notably, orders from the euro area fell by 10.5%, while orders from outside the euro area rose by 3.4%.

The impact on Hungarian suppliers is particularly concerning, as many firms depend heavily on orders from German factories, especially in the automotive sector. In April 2024, Minister for National Economy, Márton Nagy traveled to Germany for discussions on the future of the car industry, emphasizing the importance of fostering bilateral relations and adapting to the evolving market conditions.

As the weak industrial performance in Germany continues to negatively affect the broader European economy, Hungarian firms may face further challenges ahead.

Future predictions indicate that if the decline in orders persists, it could lead to reduced production levels and potential layoffs in sectors closely tied to German industry, particularly in Hungary.

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