17 March 2009 18:00 [Source: ICIS news]
TORONTO (ICIS news)--Germany’s economy is projected to shrink 4.8% in 2009, with exports falling 18%, economic research institute IWH said on Tuesday in one of the worst growth forecasts so far for Europe’s largest economy.
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In fact, additional stimulus measures may be harmful in that they could undermine trust in the government’s long-term sustainable economic policies, the institute said.
The unemployment rate will hit 8.1% this year and 9.5% in 2010, IWH said.
So far, companies had managed to avoid drastic jobs cuts by resorting to reduced working hours and other short-term measures.
However, in light of the ongoing demand and production weakness, unemployment would inevitably go up this year and in 2010, IWH said.
Excluding the pharmaceuticals sector, underlying German chemicals production is expected to shrink 5-6% in 2009, according to VCI.
In related news on Tuesday, another research institute, Mannheim-based ZEW, reported that German investor confidence rose slightly in March, from February, mainly due to lower interest rates and reduced material costs.
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