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German Economics Ministry Says Recession Is Over
Der Spiegel
Monday, July 13th, 2009
Germany has been suffering its worst recession since World War II. But the dark clouds could soon be lifting as the country looks like avoiding another quarter of negative growth.
The recession is over in Germany. That at least is the conclusion of the Economy Ministry in Berlin. In their internal report on economic growth in the second quarter, seen by SPIEGEL, the ministry's experts have come to the conclusion that growth was exactly 0 percent for the three-month period in question.
This modest but unexpected figure is welcome news. The German economy has been shrinking since the second quarter of 2008, marking the worst recession in the country since World War II. The experts base their calculations on the data available for April and May 2009 and coupled them with estimates for June. The official growth figures will only be announced by the Federal Statistics Office in August.
If confirmed, the data could allow the German government to revise its current predictions of minus 6 percent growth for 2009 and forecast a smaller contraction.
There are a number of indicators that things are slowly improving in the economy. Last week the Economics Ministry announced that there had been a 4.4 percent increase in manufacturing orders in May compared with the previous month, while industrial production increased by 5.1 percent.
However, the ministry is only expecting growth to take hold slowly. The current recovery could be slowed down by new setbacks ahead. For example the expected sharp increase of unemployment at the end of the year could lead to a reduction in consumer spending.
SOURCE: http://www.spiegel.de/international/business/0,1518,635797,00.html
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