Germany’s Bundesbank raises 2010 growth target to 3.0%

19 August 2010 14:29  [Source: ICIS news]

TORONTO (ICIS)--Germany’s federal bank, the Bundesbank, has raised its target for the country’s economic growth this year to 3.0%, from an earlier target of 1.9% in June, it said on Thursday.

Germany had made good progress in recovering from last year’s decline in production, as shown by strong 2.2% sequential GDP growth in the second quarter, the bank said.

The country’s export-driven economy had recouped almost 75% of the decline in exports during the crisis, it added.

The overall situation was “favourable” and Europe’s largest economy would continue to grow in the second half of 2010, but there continued to be risks in international financial markets, the bank said.

Also, the pace of growth would “normalise” in the second half of the year and the rate of export growth, which drove first-half GDP growth, would slow down in the second half, the bank said.

The bank also said the recovery in Germany would not be hampered by a “credit crunch,” as feared by some analysts and economists.

“Our surveys of banks and companies did not show signs of an existing or imminent credit crunch in Germany,” the bank said.

Meanwhile, Germany’s chemical production is forecast to increase 8.5% this year, after a 10% decline in 2009 from 2008, according a recent projection by chemical industry trade group VCI.

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By: Stefan Baumgarten
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