• Germany edition
 
Hundreds of great job opportunities for foreign professionals at Germany's top employers - in cooperation with Monster, Experteer, Stepstone, and CareerBuilder.
What
Where
3,240
jobs available
Find English-speaking professionals with The Local.
Advertise a vacancy
Economy facing temporary slowdown
Photo: DPA

Economy facing temporary slowdown

Published: 07 Dec 2012 09:30 CET

The German central bank, in its latest updated twice-yearly forecasts, said there were "indications that economic activity may actually fall in the final quarter of 2012 and the first quarter of 2013."

Recession is technically defined as two consecutive quarters of negative growth and many of Germany's eurozone neighbours have been pushed into recession, in some cases deep, by the region's long-running debt crisis.

Although Germany has managed to hold up to the crisis fairly well, growth has been slowing here as well since the beginning of the year. After expanding by 0.5 percent in the first quarter of 2012, gross domestic product (GDP) grew by just 0.3 percent in the second quarter and a mere 0.2 percent in the third quarter.

"The cyclical outlook for the German economy has dimmed," the Bundesbank wrote in its December monthly report.

"However, there are sound reasons to believe that Germany will soon return to a growth path. The sound underlying health of the German economy suggests that it will overcome the temporary lull without major damage to the labour market, in particular," it said.

Taking this year and next year as a whole, GDP would expand by 0.7 percent in 2012 and then by just 0.4 percent in 2013, the Bundesbank predicted.

That represents a marked downward revision from the central bank's previous forecasts in June, when it had been pencilling in growth of 1.0 percent for 2012 and 1.6 percent for 2013. It also gave its first estimation for growth in 2014, when the economy is forecast to expand by 1.9 percent.

The Bundesbank cautioned that its projections were "characterized by a high degree of uncertainty.

"It is quite conceivable that the euro area will recover sooner and the world economy will accelerate faster than assumed in this projection," it said. "Downside risks nonetheless predominate."

"Should global economic growth remain below expectations or the sovereign debt crisis escalate further in some countries, it is probable that the German economy may follow a weaker course than the one assumed in the baseline scenario," it said.

The day before, the European Central Bank unveiled its own set of -- rather gloomy -- economic forecasts for all 17 countries that share the euro.

In its regular quarterly staff economic projections, the ECB forecast that the eurozone economy will contract both this year and next year and only return to growth in 2014.

ECB chief Mario Draghi argued that the central bank's policy of low interest rates -- it held them at their historical low of 0.75 percent on Thursday -- would help fuel recovery.

The Bundesbank, too, believed the "exceptionally favourable financing conditions" would benefit businesses' investment plans.

Turning to unemployment, the Bundesbank said it expected the labour market to "come through the economic slowdown in good shape."

The jobless rate, projected to reach a low of 6.8 percent this year, would edge up to 7.2 percent in 2013 and then fall back to 7.0 percent in 2014, it said.

Inflation, too, would remain contained, easing from an anticipated 2.1 percent year this to 1.5 percent next year and 1.6 percent in the following year.

The ECB defines price stability as inflation rates just below 2.0 percent.

AFP/mry

The Local (news@thelocal.de)


Don't miss...X
Left Right

Your comments about this article:

The comments below have not been moderated in advance and are not produced by The Local unless clearly stated. Readers are responsible for the content of their own comments. Comments that breach our terms and conditions will be removed.

ADD YOUR COMMENT   (YOU MUST LOG IN OR REGISTER TO MAKE A COMMENT)
Your German Career
Germany's Federal Employment Agency has identified the job sectors the country is most short of workers for. JobTalk looks at where the vacancies lie.
Students at German universities have shown themselves to be a risk-free lot in a survey by Ernst & Young. The civil service is their most popular choice of future profession, while job security is valued above all else.
Jenny Core, originally from Bolton, England, shares her tips in this week’s My German Career on being an artist in Berlin. The 27-year-old exhibits her work regularly in the city, including next to a Turner Prize shortlister.
In this week's JobTalk, Tanya Schober, who is originally from India, talks us through her journey to German citizenship.
In this week's My German Career, Anupama Gopalakrishna, who is originally from Bangalore in India, tells The Local about her new life in Frankfurt.
In this week's My German Career, US pastor Jeff Ingram, 54, talks about life in the church and the advantages as well as the downside of Germany's desire for order.
German Employment News
Foreigners from outside the EU suffer from a much lower employment rate in Germany than native citizens and EU immigrants, a study confirmed on Wednesday.
A new YouGov survey shows job seekers in Germany are exasperated with the application process, complaining about poor job adverts and slow responses. Recruiters agree.
What would happen if everyone was suddenly paid €1,000 a month with no strings attached? "Let's try it," says Michael Bohmeyer, who raised the money through crowdfunding and will now experiment with the idea of a basic income for one year.
Germany lags its rivals when it comes to innovation, according to global rankings. But in other measures it leads Europe in technological progress. How innovative is the country really?
Germany's Federal Employment Agency has identified the job sectors the country is most short of workers for. JobTalk looks at where the vacancies lie.
JobTalk this week looks out of the classroom window and up from the translator’s desk at some of the best jobs for expats in Germany.

Officer - Submission & Bio/Cash
VFS TasHeel International is seeking a Submission & Bio/Cash Officer to manage day-to-day activities of the Visa Application Centre in Frankfurt and Berlin.
FULL JOB AD »

Ernst & Young GmbH Wirtschaftsprüfungs- gesellschaft
Berlin
Stepstone
Added 07/31/14

PwC
Frankfurt a. M., München
Stepstone
Added 07/31/14

1&1
München, Karlsruhe
Stepstone
Added 07/31/14

Ernst & Young GmbH Wirtschaftsprüfungs- gesellschaft
Frankfurt am Main
Stepstone
Added 07/31/14

Bigpoint GmbH
Hamburg
Stepstone
Added 07/31/14

Ernst & Young GmbH Wirtschaftsprüfungs- gesellschaft
Frankfurt am Main
Stepstone
Added 07/31/14

Ernst & Young GmbH Wirtschaftsprüfungs- gesellschaft
Hamburg, Frankfurt am Main
Stepstone
Added 07/31/14

Bigpoint GmbH
Hamburg
Stepstone
Added 07/31/14

Bigpoint GmbH
Hamburg
Stepstone
Added 07/31/14

Ernst & Young GmbH Wirtschaftsprüfungs- gesellschaft
Frankfurt am Main
Stepstone
Added 07/31/14