DIW Berlin lowers Germany GDP forecasts for 2012, 2013

02 October 2012 15:27  [Source: ICIS news]

LONDON (ICIS)--Germany’s DIW Berlin economics institute has lowered its forecasts for the country’s GDP growth in 2012 and 2013 because of continued risks from the eurozone crisis and a weaker global economy, it said on Tuesday.

DIW forecasts Germany’s GDP growth at 0.9% in 2012 and 1.6% in 2013 - down from its previous projections of 1.0% for 2012 and 1.9% for 2013.

“For the time being, the headwinds are continuing, with weakness in production and new orders, and dimmer prospects on labour markets,” DIW economics head Ferdinand Fichtner said.

“The biggest risk for Germany’s export-dependent economy is still the eurozone crisis,” Fichtner added.

While the intervention of the European Central Bank made it less likely that the eurozone crisis will escalate, an escalation could not be excluded completely, he said.

Germany’s economic growth is held back by falling demand for German products from the eurozone crisis countries, as well as significantly lower demand from the rest of the world.

Fichtner said that growth in emerging economies, but also in the US, had slowed down in recent months.

However, in China and Brazil, in particular, governments were reacting to the weakness with an expansionary monetary policy and stimulus measures, paving the way for stronger growth rates towards the end of 2012, he said.

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

By: Stefan Baumgarten
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