Germany is expected to record a decline in gross domestic product of 0.8 percent next year, the largest in the last 16 years, announced the central bank Bundesbank in its semi-annual macroeconomic projections.
The largest European economy last experienced such a significant decline in 1993 when GDP was also 0.8 percent lower. The first full-year recession will be primarily driven by a drop in exports, which, according to the central bank’s forecasts, will amount to 0.5 percent next year after this year’s growth of 4.4 percent. Germany is already in recession as it has recorded a decline in economic activity for two consecutive quarters, and a similar trend is expected in the last quarter of this year.
‘Provided that extensive packages of measures lead to a gradual improvement in the situation on financial markets and global economic activity recovers in 2010, GDP growth of 1.2 percent can be expected,’ concluded Bundesbank experts. (H. M.)
