The recession in Germany accelerated in 1Q, with GDP falling a record 3.8% from 4Q. Remember, figures in the US are annualized so Germany's decline is much worse than what we saw released in the US a couple of weeks ago.
Germany, which is Europe’s largest economy, is clearly showing the strains of the export-led recession, while the government also noted that capital formation was considerably lower versus 4Q.
Officials expect GDP to shrink by 6% this year and over $100 billion in stimulus spending is in the pipeline to rescue the weak economy. Exports, however, do appear to be stabilizing, and business confidence has come off the lows.
Plus, the European Central Bank is finally comprehending the magnitude of the economic crisis and is belatedly taking more forceful action to support the eurozone economy.
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