Gloomy German growth forecast
German exports plunged in August by their largest amount since the height of the financial crisis
They were down by 5.8 percent, though the Federal Statistics Office said that was partly due to summer holidays being taken later than usual in some German states, which also hit imports. It is the latest sign that the economy is faltering amid broader Eurozone weakness and crises abroad which have battered confidence and delayed German firms’ investment plans.
At the same time, a group of leading economic institutes slashed their growth forecasts.
They are now expecting Europe’s largest economy to expand by 1.3 percent this year and 1.2 percent next, down from 1.9 and 2.0 percent previously.
The institutes also urged the government to increase growth stimulus through capital spending and to encourage private investment, stressing there was sufficient ‘financial room for manoeuvre’.
Chancellor Angela Merkel’s government has faced pressure from within Germany, as well as from ailing European states such as France and Italy.
Materials prepared with aid of information agencies