| German economic recovery expected to slow significantly in 2H |
| Date: 2010/9/24 Click: 1907 |
|
German economic recovery was expected to continue into the second half of the year, albeit at a significantly slower pace partly due to gloom in some of its trade partners, the German Finance Ministry said in its monthly report on Monday.
The German economy had started favorably in the third quarter, the report said. However, evidence was beginning to show that the Germany's growth may have peaked.
The ministry said the speed of expansion of foreign demand was likely to decline as global economy was weakening. Official data showed that German exports dropped 1.5 percent and factory orders declined 2.2 percent in July. The German ZEW investor confidence fell sharply to a 19-month low in September.
The ministry also said the number out of work fell less than economists forecast in August and falling unemployment may boost consumer spending and help to further stimulate domestic demand. It also forecast the labor market to improve further as the cyclical upswing continued.
German Economy Minister Rainer Bruederle said today that Germany's economic growth pace would normalize later and growth rates would be below the 2.2 percent quarterly growth recorded during the second quarter. He said the government was likely to revise upward its 1.4 percent growth forecast for 2010 which was made in April, saying that growth of over 2 percent and close to 3 percent was possible.
Last week RWI, the Essen Based economic institute, forecast German economy would expand 3.4 percent in 2010 and 2.2 percent in 2011. |
