German industrial output and exports declined in April

Germany’s industrial production and export fell in April, dashing hopes for a recovery in the nation’s critical economic sector amid looming US import tariff threats, Bloomberg reports.

Compared to March, Germany's industrial output declined by 1.4%, while exports fell by 1.7%. Both indicators dropped more sharply than analysts from the news agency had forecast.

Europe's largest economy got off to a strong start this year, posting significant growth in the first quarter. Exporters and business representatives raced to get ahead of anticipated US tariff impacts.

Meanwhile, the second quarter has started off on a poor footing. The industrial production data showed a decline, highlighting challenges facing the country's new Chancellor Friedrich Merz.

At the same time, the government's plans to significantly increase defense and infrastructure outlays have brought some optimism. Germany's cabinet approved a package of tax breaks for companies worth around 46 billion euro ($52 billion) as part of a program to stabilize the economy.