Peak Data.

A point of no return.

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1. Germany is reaching a point of no return. Business leaders know it, the people in the country feel it, but politicians haven’t come up with answers. That has set Europe’s largest economy on a path of decline that threatens to become irreversible. Following five years of stagnation, Germany’s economy is now 5% smaller than it would have been if the pre-pandemic growth trend had been maintained. More worryingly, Bloomberg Economics estimates that the bulk of the shortfall will be tough to recover, due to structural blows such as the loss of cheap Russian energy and Volkswagen AG and Mercedes-Benz Group AG struggling to keep pace with China’s auto firms. The decline in national competitiveness means every household is worse off by about €2,500 ($2,600) a year. (Source: bloomberg.com)

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2. German Chancellor Olaf Scholz will submit to a parliamentary vote of confidence later today that he has every intention of losing to trigger a snap election on Feb. 23. Scholz will deliver a 25-minute statement to lawmakers in the lower house of parliament, or Bundestag, starting at 1 p.m. local time in Berlin, followed by a two-hour debate. The result of the roll-call vote should be known by around 4 p.m. The far-right Alternative for Germany threatened to disrupt Scholz’s plans by voting in favor of the confidence motion, prompting the Greens to announce that they plan to abstain. That makes it all-but certain Scholz will lose as planned. Once that happens, he can ask President Frank-Walter Steinmeier to dissolve the Bundestag and set the election date. Steinmeier, a former Social Democrat vice chancellor, has indicated that he’ll go along with Scholz’s timetable. (Source: bloomberg.com)

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3. China’s retail sales growth unexpectedly weakened in November despite signs of improvement in the housing market, highlighting the urgency for Beijing to further encourage residents to spend. Retail sales rose 3% from a year ago, the slowest pace in three months and undershooting even the most bearish of forecasts. Industrial output increased 5.4%, keeping momentum as the manufacturing side of the economy continues to outperform consumer spending. “The data show that the recovery in domestic demand has remained sluggish, while the stabilization in industrial production was likely due to some order front-loading ahead of US tariffs and is not sustainable,” said Michelle Lam, Greater China economist at Societe Generale SA. (Source: bloomberg.com)

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