German industrial output plunged in December at the steepest rate in 16 months and exports unexpectedly dropped, in a sign that Europe's largest economy ended 2015 on a weak footing. David Pollard reports
China's shift to a consumer-led economy has made waves throughout the global economy. Could Germany be going through a similar shift - albeit, an uninentional one ? Industrial output for Europe's powerhouse showed a dramatic drop in December. Plunging at the steepest rate in 16 months. Imports and exports also fell - unexpectedly. The recent weakening meaning new questions for the ECB over how to restore confidence. BGC Partners Mike Ingram. (SOUNDBITE) (English) BGC PARTNERS, MARKET ANALYST, MIKE INGRAM, SAYING: "Mario Draghi is always keen to point out that what Europe is experiencing is a cyclical recovery - but there's been relatively little progress in raising the structural growth path in terms of the European economy as a whole and the picture on the ground remains extremely patchy, ranging from powerhouse Germany to deeply troubled Greece." Amid robust wage growth, low interest rates and low oil prices, consumer demand is buoying Germany's economy. But even with that, Europe may need more than just more ECB loosening. According to Vicky Pryce, chief economic adviser at CEBR. (SOUNDBITE) (English) CHIEF ECONOMIC ADVISER, CEBR, VICKY PRYCE, SAYING: "There is a limit to what monetary policy can do. Draghi, the head of the European Central Bank, is probably going to try to do even more from here on. He's already extended quantitative easing. Well, we'll see what he's allowed to do with that by the Germans in particular, if they do realise Europe does actually need a bit of a push." The latest data comes hard on the heels of Monday's Sentix data - showing investor optimism at its lowest level in over a year. Former locomotive Germany noticeably cooling, it said - the global economy now in a very fragile state.