Open

Coming up

Don't miss

Replay


LATEST SHOWS

DEBATE

Israel-Gaza, From Bad to Worse? With no Ceasefire in Sight, Conflict Spillover Felt Elsewhere (part 2)

Read more

DEBATE

Israel-Gaza, From Bad to Worse? With no Ceasefire in Sight, Conflict Spillover Felt Elsewhere

Read more

FOCUS

Overfishing and the global appetite for bluefin tuna: can Tokyo help turn the tide?

Read more

EUROPE NOW

Best of Europe Now (Part 1)

Read more

ENCORE!

Clapton pays hommage to 'Cocaine' songwriter J.J. Cale

Read more

TALKING EUROPE

Dalia Grybauskaite, President of the Republic of Lithuania

Read more

TALKING EUROPE

Alexander Stubb, Prime Minister of Finland

Read more

WEB NEWS

Web users pay tribute to MH17 victims

Read more

THE INTERVIEW

Lieutenant General David Morrison, Australia's Army Chief

Read more

  • Ukraine rebels release bodies, black boxes from flight MH17

    Read more

  • Over 100,000 displaced in Gaza as death toll escalates

    Read more

  • An ‘explosion of violence’: French press reacts to Gaza protests

    Read more

  • US, UK oppose France’s warship sale to Russia

    Read more

  • Notorious ‘VIP’ prison in Paris closed for renovations

    Read more

  • Christians in Iraq's Mosul face execution or exodus

    Read more

  • Scores killed as Libyan militias fight over airport

    Read more

  • Ukraine football players refuse to return home after friendly in France

    Read more

  • China steps up communist education to guard against ‘moral decline’

    Read more

  • France slams ‘anti-Semitic’ violence at pro-Palestinian rally

    Read more

  • French rugby stars attacked with machetes and swords

    Read more

  • Hollande announces new military operation in West Africa

    Read more

  • Prince George picture released to mark first birthday

    Read more

  • Kristoff wins Tour’s flat Stage 15

    Read more

Business

Europe's largest economy drops deeper into recession

Latest update : 2009-01-14

The German economy shrunk by 1.5-2.0% in the last quarter of 2008, according to an estimate by the national statistics office. The news comes a day after the government unveiled a second €50bn economic stimulus package.

AFP - The German economy shrank by 1.5-2.0 percent in the fourth quarter, official data showed Wednesday, as the financial crisis and strong euro plunged Europe's powerhouse deeper into recession.
   
The contraction, which compared with the third quarter, was in line with suggestions from officials in recent weeks but underlined the problems facing Europe's biggest economy and the world's leading exporter.
   
On Tuesday, Chancellor Angela Merkel unveiled a second economic stimulus package of 50 billion euros (66 billion dollars), the largest since 1945.
   
The German economy contracted in the second and third quarters.
   
Over 2008 as a whole, the economy grew by 1.3 percent, provisional figures released by the Destatis statistics office showed.
   
Commenting on the fourth quarter, Destatis director Norbert Raeth told a press conference in Frankfurt that it was "extremely difficult" to give an estimate because of the "current instability of economic conditions."
   
He stressed that the figures could be revised in mid-February, when Destatis is to provide more precise data on fourth quarter economic activity.
   
In 2007, the biggest European economy had grown by 2.5 percent, and economists polled by Dow Jones Newswires had expected an increase of 1.4 percent last year.
   
The government's official 2008 forecast was for growth of 1.7 percent.
   
Germany has been hit hard by the global economic slowdown and the euro's rise in value against the dollar, which have curbed demand for its automobiles, household appliances and machine tools.
   
When the 2008 data was adjusted for the number of working days each year, the annual growth figure fell to 1.0 percent.
   
Exports increased by 3.9 percent in 2008, nearly half the level a year earlier, while imports rose by 5.2 percent, and private consumption was unchanged, Destatis said.
   
Berlin still officially expects the economy to grow by 0.2 percent this year but Finance Minister Peer Steinbrueck has already warned it could shrink by up to 1.0 percent.
   
A finance ministry source has said the economy could contract by up to 3.0 percent in 2009, which would mark the biggest decline since World War II.
   
Germany also posted a public deficit equivalent to 0.1 percent of gross domestic product (GDP) last year, improving slightly on the the 2007 figure of 0.2 percent of GDP.
   
But Steinbrueck was quoted by the Financial Times Deutschland on Wednesday as saying that the German public deficit would soar to more than four percent of GDP in 2010, breaching European Union rules.
   
"We will be well above four percent in 2010," Steinbrueck said in an interview with the Financial Times Deutschland.
   
Under the EU's Stability and Growth Pact, eurozone members are bound to maintain public deficits below 3.0 percent of GDP

Date created : 2009-01-14

COMMENT(S)