Skip to comments.Bundesbank sees "noticeable" German GDP shrinkage
Posted on 12/17/2012 9:22:07 PM PST by DeaconBenjamin
Germany's economy is headed for a "noticeable" contraction in the current quarter and will probably tread water next year, the central bank wrote Monday, reiterating the downbeat forecast it issued earlier this month.
Some major sentiment reports suggest that the economy could be bottoming out.
"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 Bundesbank wrote. The outlook for German companies has "deteriorated" amid a slowdown in global growth and falling demand from the rest of the euro zone.
Earlier this month, the Bundesbank slashed its forecast for German growth next year to 0.4% from its June estimate of 1.6%, and warned that the nation may sink into recession over the winter months.
Germany has been the euro zone's economic engine in recent quarters, expanding throughout this year--by 0.2% in the third quarter--even as many peripheral economies floundered.
Still, the Bundesbank reiterated Monday that Germany's "cyclical weak phase" may be short as business expectations have now "stabilized at a low level" and are starting to turn positive.
While the economy is unlikely to grow in the first quarter of next year, "a further drop could be avoided" provided weather conditions remain "normal", the Bundesbank said.
Leading indicators for Germany have stabilized in recent weeks and appear to be turning upward. German manufacturing orders rebounded more than expected in October on strong foreign demand, the economic ministry reported. Meanwhile, German investor confidence unexpectedly surged last week to its highest level since May.
Separately, the Bundesbank also forecast that net immigration to Germany will increase to about 350,000 this year, and remain at a robust 250,000 in both 2013 and 2014, as difficult economic conditions on Europe's geographic periphery encourage people to relocate.
(Excerpt) Read more at marketwatch.com ...
I work at a small aircraft museum in the Florida Keys. the biggest share of our overseas visitors are from Germany. One group even included several Russians, now working in Germany.
If you keep squandering capital to subsidize the non productive consumption of Greeks and other fakers, mothball your nuclear power plants, waste even more capital on economically futile green projects, and raise taxes, just what did you expect? Financial gimmickry will never produce wealth. History will never confuse Frau Merkel with Lady Thatcher.
George Costanza knows all about shrinkage!