Germany edition

Bundesbank sees economy shrinking

Published: 17 Dec 12 14:36 CET | Print version
Online: http://www.thelocal.de/money/20121217-46819.html

The German economy, Europe's biggest, is set to contract "noticeably" in the fourth quarter of this year and will probably tread water early next year, the Bundesbank forecast on Monday.

Spain and Germany fight youth employment (22 May 13)
Some fear inflation if small euro coins cut (19 May 13)
Economists warn against German euro exit (18 May 13)

"Current indicators point to a noticeable drop in economic production at the end of the year," largely due to weakness in the country's key industrial sector, the German central bank wrote in latest monthly report, reiterating its updated growth forecasts published 10 days ago.

The outlook for German companies had "deteriorated" amid a slowdown in global growth and falling demand from the rest of the eurozone, it said.

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.

But economy would likely contract in the final quarter, the Bundesbank predicting. And that would mean the economy would grow by just 0.7 percent over the whole year, instead of the 1.6-percent forecast in June.

Looking ahead to next year, the economy was unlikely to grow in the first quarter of next year, even if "a further drop could be avoided" provided weather conditions remain "normal", the Bundesbank said.

Overall, the central bank is penciling in growth of a mere 0.4 percent for 2013, it said.

AFP/mry

What do you think? Leave your comment below.

Your comments about this article:

15:09 December 17, 2012 by Berlin fuer alles

When the rest of the world gets a cold Deutschland sneezes also. Dr. Merkyl and Mr. Hyde makes sure the rest of the Eurozone remains sick. What else can she expect.

Report abuse »

20:58 December 17, 2012 by smart2012

Germany ... WAS ..... booming ;)

Report abuse »

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