Manufacturing orders in Germany increased by more than expected in the first month of the year on strong domestic demand that improves the case for the region’s central bank to begin tightening policy, according to The Wall Street Journal. On Tuesday, the German economics ministry reported that manufacturing orders grew by 2.9% in January from the month before, outpacing the 2.5% increase that analysts were expecting, almost completely erasing the 3.6% decline seen in December. Domestic orders drove the gain, adding 4.6% as overall orders added 19.7% year-over-year.
Meanwhile, European Central Bank governing council member Axel Weber said that the German economy was likely to post strong growth in 2011, although it may fall short of the 3.6% expansion seen in 2010. Weber also encouraged the ECB to start winding down special liquidity measures as policymakers prepare to unveil new measures for “addicted banks.” According to Bloomberg, Weber also promoted the view that the central bank would raise the benchmark interest rate by a quarter point three times this year to 1.75% on “more sustained and more fundamental” inflation than forecast in the latest official projections.
Click here to read the story from The Wall Street Journal.
Click here for additional coverage of Weber’s comments from Bloomberg News.