Recession confirmed for German economy
Global downturn hits Germany
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Thursday, 13, Nov 2008 10:10
Germany has succumbed to global economic woes by officially falling into recession today.
Over the third quarter of 2008 the German economy contracted by 0.5 per cent, following a 0.4 per cent shrinkage in GDP in the second quarter.
Germany is now in its second recession in five years.
The drop in output was put down to a fall in export demand.
"As imports recorded a considerable increase and exports saw a decline, the balance of exports and imports had a negative impact on the development of the gross domestic product," a statement from the German Federal Statistics Office read.
However, the data show German employment rose 1.5 per cent or by 582,000 persons over the year.
"Germany is no longer weathering the global storm," said Jennifer McKeown at Capital Economics, who had expected a smaller 0.3 per cent drop in German GDP.
"The monthly data so far paint a worryingly picture."
She explained industrial production has fallen, the service sector is expected to stay flat and export volumes are stagnating.
"Germany in its second recession in five years," she concluded.
The news comes as Alistair Darling today admitted the UK was heading to recession and UK unemployment figures yesterday saw joblessness at an 11-year high.