“The German economy will only shrink by five percent in 2009 if we have a solid upswing by summer,” Walter, who had previously predicted such a downturn as a worst-case scenario, told the paper. “But it can't be ruled out that this upswing won't happen. Therefore we can't rule out a higher loss.”
Companies and politicians have sugarcoated the country's economic situation, the head economist of Germany's largest private bank said, adding that they are “ignoring the truth.”
“All previous economic forecasts will be exceeded by Easter,” he said.
To fight the dramatic recession, the world will need coordinated international action leading to more private and public spending, he added.
“Worldwide we must sit down, at best under the leadership of US President Obama,” Walter told the paper.
The German government currently predicts GDP to decline by 2.25 percent this year.