Germany to show zero Q1 GDP growth but will escape recession

29 February 2012 15:53  [Source: ICIS news]

LONDON (ICIS)--Germany’s economy is likely to show zero growth in the first quarter of 2012, narrowly avoiding a recession after a 0.2% sequential decline in the 2011 fourth quarter, an economics research group said on Wednesday.

“Germany’s economy has, for now, withstood impacts from the crisis in the eurozone,” DIW Berlin said in an update.

DIW said its assessments of Germany's first-quarter performance so far showed continued weakness in industrial orders.

Even though industrial production is expected to pick up, it will likely reach only a level of just above the 2011 fourth quarter, the institute said.

It expects Europe's largest economy to register more perceptible growth rates, beginning in spring, it said.

DIW added that companies were relatively optimistic in their outlook for Germany. One positive factor was relatively strong German employment, which should translate into increased consumer spending, it said.

In a related report on Wednesday, the country’s federal employment agency said that jobs markets continued to develop positively in February, despite the current economic weakness.

The number of unemployed rose by 26,000 to 3.11m in February from January, for an unemployment rate of 7.4%, up 0.1 percentage points, the agency said.

Compared with February 2011, unemployment was down by 203,000.

Paul Hodges studies key influences shaping the chemical industry in his Chemicals and the Economy Blog

By: Stefan Baumgarten
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