Germany growth forecast up to 1%
Source: Agencies |
June 9, 2012, Saturday
|
Print Edition
Print Edition
GERMANY'S central bank raised its 2012 economic growth forecast for the country to 1 percent yesterday, citing global growth and a boost to domestic demand from a healthy labor market and low borrowing costs.
The Bundesbank's prediction compared with its previous forecast of 0.6 percent growth in gross domestic product this year, made last December during a rare weak patch for Germany, Europe's biggest economy.
It said the economy could grow by 1.6 percent in 2013, slightly below its previous prediction of 1.8 percent.
Germany's economy returned to healthy quarter-on-quarter growth of 0.5 percent in the January-March period after contracting slightly in the final quarter of 2011. The country's unemployment rate stood at a low level of 6.7 percent in May.
The government's borrowing costs have sunk to rock-bottom levels as investors view Germany as a safe haven amid the eurozone debt crisis. The European Central Bank's benchmark interest rate, meanwhile, is at a record-low 1 percent.
"All in all, the economic picture in Germany is much more favorable than in most other European economies," Bundesbank Chairman Jens Weidmann said. While Germany has powered ahead, many other eurozone countries are seeing their economies shrink and unemployment rise - in Spain and Greece, to more than 20 percent.
Yesterday, official data showed that exports from Germany dropped 1.7 percent in April compared with the previous month - a fall that was sharper than expected and followed three consecutive months of gains.
The Bundesbank's prediction compared with its previous forecast of 0.6 percent growth in gross domestic product this year, made last December during a rare weak patch for Germany, Europe's biggest economy.
It said the economy could grow by 1.6 percent in 2013, slightly below its previous prediction of 1.8 percent.
Germany's economy returned to healthy quarter-on-quarter growth of 0.5 percent in the January-March period after contracting slightly in the final quarter of 2011. The country's unemployment rate stood at a low level of 6.7 percent in May.
The government's borrowing costs have sunk to rock-bottom levels as investors view Germany as a safe haven amid the eurozone debt crisis. The European Central Bank's benchmark interest rate, meanwhile, is at a record-low 1 percent.
"All in all, the economic picture in Germany is much more favorable than in most other European economies," Bundesbank Chairman Jens Weidmann said. While Germany has powered ahead, many other eurozone countries are seeing their economies shrink and unemployment rise - in Spain and Greece, to more than 20 percent.
Yesterday, official data showed that exports from Germany dropped 1.7 percent in April compared with the previous month - a fall that was sharper than expected and followed three consecutive months of gains.
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