An economic slowdown in Germany could bode ill for its easterly neigbors, whose open economies make them vulnerable to weakness in their biggest export market.
Official figures published Monday showed German industrial production fell by 1.8 percent in May from April—sharply worse than the flat reading anticipated. Moreover, revision to the figure for April showed production also fell during that month, by 0.3 percent.
The data came in the wake of surveys suggesting weakening business sentiment in Germany, and indicate a slowdown that could hit those emerging European economies which have it as their biggest trading partner. These include the former Soviet satellite states of Poland, Hungary, the Czech Republic and Slovakia, as well as Slovenia and Turkey.