World Economic outlook - Germany Q2 GDP Outlook Report august 14 2012 : Over the past two weeks, the largest economy of Europe is hit by a series of depressing statistics that shows a decline is manufacturing orders, import-exports as well as industrial outputs.
On Friday, the minister of economics said, “These data and huge drop-off in the business in these recent months will appear as a significant risk for Germany.”
Next Tuesday, GDP (Gross Domestic Production) for the 2nd quarter is expected to come up with a modest growth of about 0.2 %. Therefore, the danger of recession at the 2nd half of this year is increasing. A leading economist said, “At this moment the single currency bloc of Europe desperately needs expansion from the powerhouse of economy.”
German Chancellor, Angela Merkel will face difficulty if this slowdown continues to threaten his country more so since he is looking to contest for his third term just a year from now. She could easily draw in voters for her with effective “fighting with crisis” strategy especially when the rate of unemployment is on a rise.
The chief economist at commerzbank, Joerg Kraemer said, “The economy of German will lose momentum and at the third quarter, it will shrink more compared to the 2nd quarter, if this situation continues.”
“The economy of the German is not pricing so badly as the other region of the Euro zone but it cannot separate itself from the reaction, especially the growth of china is at downside and it is continuing to do so.”
German is well known for its growth from export, but this crisis of Euro has hit its growing market. Approximately, 40% of the exports of this country go to the partners in the “currency zone” and sixty percent of those in the broader of European Union.
China is the one of the fastest growing markets of German. China is representing 7% of total exports, which is slowing down. The rising of factory output is at the slowest pace in 3 years.
The private consumption will compensate widely in German, this is the only hope in 2012. Employment rate stood at 6.8% in July at German. The strong wages is rising for both public sectors as well as manufacturing sector, which will boost up the domestic demand. However, the recent data is showing that the retail sales are falling back.
At the last month, Germany Metro’s Chief executive said, “The retail condition is worsening day by day. With the problem of debt crisis, other factors may raise the expenditure of German.”
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