German inflation accelerated more than anticipated last month, backing the European Central Bank’s plans to keep cutting interest rates only gradually, Bloomberg News reported. Consumer prices rose 2.9% from a year ago in December, up from 2.4% in the previous month. The acceleration was driven by energy and food costs, the statistics office said. German short-term yields pushed higher after the release. The yield on two-year debt was up four basis points at 2.2%, while traders trimmed ECB rate-cut bets slightly.
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Germany
Germany’s jobless rate held steady in December despite the continuing specter of jobs losses at major manufacturing firms, the Wall Street Journal reported. Germany’s adjusted unemployment rate was stable at 6.1% in December, data from the Federal Employment Agency showed Friday. However, there are indications the jobs market is cooling. Jobless claims ticked up 10,000 in December, on an adjusted basis, more than the 6,000 in November. Registered job vacancies stood at 654,000, around 59,000 fewer than the same point last year.
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German air taxi manufacturer Volocopter has declared insolvency as it seeks new funding, the company announced from its headquarters at Bruchsal near Stuttgart, DPA International reported. "The company needs funding that will allow it to take the final steps to entering the market," the new court-appointed insolvency administrator said. Volocopter still needs type certification from the European Union Aviation Safety Agency (EASA) for its electrical vertical take-off and landing (eVTOL) aircraft to be allowed to carry passengers.
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Gerhardi Kunststofftechnik GmbH, based in Germany and known for manufacturing emblems for Mercedes-Benz, has filed for bankruptcy, autojosh.com reported. This decision stemmed from a reduced demand for their products amid a broader crisis affecting the European automotive sector. Reports indicate that Gerhardi Kunststofftechnik GmbH struggled to navigate the obstacles presented by today’s European automotive landscape, particularly due to the falling demand for electric vehicles. Founded in 1796, the company weathered two world wars but ultimately went bankrupt in 2024.
German start-up Lilium, known for its innovative flying taxi technology, has successfully avoided bankruptcy by securing a new investor, The Munich Eye reported. The Mobile Uplift Corporation GmbH, a consortium of investors from Europe and North America, has agreed to take over the flight taxi developer. A purchase agreement has been signed for the operational assets of Lilium GmbH and its subsidiary, Lilium eAircraft GmbH.
German multinational machinery maker Manz announced from its Reutlingen headquarters on Wednesday that it is to apply for insolvency, DPAInternational reported. The company's executive board took the decision on account of inability to pay its bills and high debts. The application is to be made in the next few days. The company's lenders had decided not to come up with additional funding following intensive talks between the board and investors, it said. The board was continuing to talk to potential investors, it added.
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Germany's economic downturn eased slightly in December but business activity still contracted for a sixth month running, according to a survey published on Monday, Reuters reported. The HCOB German flash composite Purchasing Managers' Index, compiled by S&P Global, rose to 47.8 from 47.2 in November, but remained in contraction territory. Analysts polled by Reuters had forecast a reading of 47.8. The business activity index for Germany's services sector rose to 51.0 in December from 49.3 in November, beating the forecast of 49.4. Any reading above 50 indicates expansion.
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Germany’s economy will hardly grow in 2025 after shrinking again this year, according to fresh forecasts from Bundesbank, Bloomberg News reported. Gross domestic product will fall by 0.2% in 2024, it said Friday — slashing a June prediction for 0.3% growth. Output will expand by just 0.2% in 2025, rather than the 1.1% seen earlier, and could even fall if US trade tariffs materialize. “The German economy is not only struggling with persistent economic headwinds, but also with structural problems,” Bundesbank President Joachim Nagel said, highlighting the industrial sector in particular.
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Germany’s economy is at a crossroads after treading water for five years, and will only recover should the country make radical structural changes, according to a leading economics research group, the Wall Street Journal reported. The Ifo Institute said that Germany’s economy would shrink 0.1% this year, and only grow 0.4% in 2025, unless the government implemented pro-growth policies that included lowering corporate taxes, lessening bureaucracy, improving infrastructure and boosting the labor supply.
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Solarmax, a German inverter and battery storage systems specialist with more than 30 years of experience, is facing insolvency. Last week, a German district court opened preliminary insolvency proceedings against the Bayern-based company, PV-Magazine.com reported. The Neu-Ulm district court judges appointed Michael Pluta of Pluta Rechtsanwalts GmbH as preliminary insolvency administrator, as his law firm published on Friday. A statement from Pluta said Solarmax was experiencing financial difficulties due to market conditions.
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