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Germany Monitor

In the "Germany Monitor" series we address political and structural issues which have great significance for Germany. These include commentaries on elections and political decisions, as well as technology and industry issues, and macro-economic topics which go beyond the business cycle matters addressed in "Focus Germany".

1 Document
January 29, 2009
Region:
1
For the first time in five years Germany is back in recession. Economic output has been on the decline since the second quarter of 2008. The financial markets crisis and the global economic downturn will weigh heavily on growth in 2009. Gross domestic product will continue to contract in real terms at least until the middle of this year. The loss of major sales markets and the surge in the euro – even though it has retraced slightly – will likely cause exports to decline markedly in real terms for the first time since 1993. Shrinking foreign demand together with declining profits in many sectors will lead to investment in plant and equipment contracting by 10%. Despite fiscal stimulus packages private consumption is scarcely likely to increase by more than a tad again in 2009 in the face of significantly falling employment and a rising savings ratio. [more]
2.1.5