The prestigious German economic institute Ifo from Munich announced on Thursday a forecast that next year the gross national income in Germany will decrease by 2.2 percent, and half a million citizens will lose their jobs.
Presenting the forecasts, the director of the institute, Hans-Werner Sinn, stated that this 2.2 percent is a grim figure and that the recession in Germany is part of the global economic crisis that has also affected the highly export-oriented German economy. "We are floating on the wave of the global recession like a cork," said Sinn, asserting that domestic consumption, which could increase in the coming period due to wage growth and government stimulus packages, will not be able to mitigate the negative consequences of reduced exports.
Unlike other leading economic institutes, the Ifo Institute predicts that the recession will continue in a diminished form in 2010. "In 2010, the consequences of the 2009 recession will still be felt, so the decrease in gross national income will amount to 0.2 percent," said Sinn. According to Ifo institute experts, one of the consequences of reduced demand and delayed investments will be an increase in the number of unemployed by about half a million. "Next year, the number of unemployed will again approach the figure of four million," warns Sinn. After the RWI institute from Essen also announced a recession of two percent on Wednesday, it is the second influential economic institute predicting a significantly worse economic situation for the next year than previously estimated. The German government still maintains its estimate that the German economy will grow by 0.2 percent next year. (H)
