🐂 Not all bull runs are created equal. November’s AI picks include 5 stocks up +20% eachUnlock Stocks

POLL-Exports will fuel gradual German recovery in 2010

Published 10/15/2009, 09:30 AM
Updated 10/15/2009, 09:33 AM

* Export sector will fuel recovery in 2010

* Joblessness to rise, dampening private consumption

By Sarah Marsh and Kristina Mignon

BERLIN, Oct 15 (Reuters) - The German economy is likely to stage a steady recovery over the coming year, with a rise in exports compensating for weaker private consumption, a Reuters poll of economists showed on Thursday.

The median forecast in the survey of 20 economists showed gross domestic product (GDP) in Europe's largest economy growing 1.3 percent in 2010 after contracting 5 percent this year.

"Growth will pick up, but it won't be as strong as in the past," said Arnd Schaefer, economist at WestLB. "The really strong year will be 2012."

Germany emerged from its deepest post-war recession in the second quarter, when the economy grew by 0.3 percent.

The Reuters poll predicted GDP would rise by another 0.7 percent in the third quarter just ended, in line with the Bundesbank's forecast. The consensus is pointing to a weaker expansion of 0.3 percent in the current quarter.

The German Chambers of Industry and Commerce (DIHK) said on Wednesday that Germany was recovering faster than expected and business expectations were at their highest level since mid-2008.

A strong pick-up in exports is seen driving the recovery after Germany, the world's top exporter of goods, was hit particularly hard by the global slump.

Exports are seen slumping 14.8 percent in 2009, before rising 4.4 percent in the first quarter of 2010 and 5.7 percent over the course of the year, according to the Reuters poll.

WEAKER PRIVATE CONSUMPTION

Still, economists fear foreign and domestic demand is being driven by global government stimulus measures and a self-sustaining recovery is still not on the horizon.

"When the stimulus packages run out, the recovery will become more moderate once again," said Alexander Koch, economist at UniCredit.

Unemployment is also a serious concern. It is seen averaging 8.3 percent in 2009 and 9.8 percent in 2010, weighing on private consumption which is forecast to start falling in the second quarter of next year, dipping 0.4 percent over the full year.

"Fear of job losses dampens private consumption," said Koch.

So far consumers have shrugged off worries over joblessness, with morale rising to its highest level in 16 months heading into October on growing confidence the economy has passed its low point, according to the GfK research group. Analysts say a government scheme that encourages firms to put employees on part-time work rather than fire them has so far offset the real impact of the downturn on the German labour market and job losses are likely to accelerate in the coming months.

(Additional Reporting by Klaus Lauer; Editing by Ruth Pitchford)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.