Germany economy still robust despite eurozone weakness – ministry

11 September 2012 17:52  [Source: ICIS news]

LONDON (ICIS)--Germany’s economic performance is still “robust and resistant” despite recessionary trends in the eurozone and difficult global conditions, the country’s economics ministry said in an update on Tuesday.

“According to recent economic indicators, Germany’s economic trends in the second half of the year should develop in a stable manner,” the ministry said.

“However, we cannot issue an ‘all-clear’: the economic downward risks outweigh the positives and remain significant,” it added.

The ministry pointed to recent increases in Germany's production and industrial orders, and to economic sentiment surveys that indicated some improvement in confidence among firms.

Meanwhile, Germany’s exports were also picking up more recently, even though the pace of growth was moderate, the ministry said.

Furthermore, the ministry noted rising German imports from Italy and Portugal, which could be a first sign that those countries are on their way to improve their competitiveness, it said.

As for developments outside Europe, the ministry noted weak second-quarter economic performances in the US and Japan, as well as the slowdown in China’s growth rates.

“The global economy remains fragile, which means that the environment for Germany’ exporters will be difficult for the time being,” the ministry said.

The ministry also said that government bond purchases by the European Central Bank (ECB) can only provide temporary relief to ensure liquidity in the economy. 

However, such measures were no substitute for credible structural reforms in the affected eurozone member countries, the ministry said.

The ministry's assessment for Germany compares with a report by the Organisation for Economic Co-operation and Development (OECD) in Paris, which last week forecast that the eurozone's three largest economies – Germany, France and Italy – will shrink at an annualised rate of 1.0% on average during the third quarter and at 0.7% in the fourth.

Also last week, Germany’s chemical producers' association VCI cut its 2012 forecast for the country’s chemical production, predicting a 3.0% year-on-year decline as eurozone weakness is affecting the domestic chemical business.

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

By: Stefan Baumgarten
+1 713 525 2653

AddThis Social Bookmark Button

For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.

Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.

Printer Friendly

Get access to breaking chemical news as it happens.
ICIS Global Petrochemical Index (IPEX)
ICIS Global Petrochemical Index (IPEX). Download the free tabular data and a chart of the historical index