Coming up

Don't miss




Gaza: A Truce At All Costs?

Read more


Central African Republic: Brazzaville ceasefire talks deliver fragile deal

Read more


Sluggish tourist season in Crimea

Read more


Bartabas : Mixing Christ with Spanish music and dancing horses

Read more


Shifts in the propaganda war waged between Israelis and Palestinians

Read more


French MPs face quandary in pro-Palestinian rallies

Read more


Yezid Sayigh, Senior Associate at the Carnegie Middle East Center in Beirut

Read more

#TECH 24

Mind the Gender Gap : getting more women into the tech sector

Read more


Bolivian children: heading to work aged 10

Read more

  • Wreckage of Algeria plane found in Mali

    Read more

  • Air Algérie crash: 'We should eliminate the missile hypothesis'

    Read more

  • Protest turns deadly as Palestinians rally against Gaza offensive

    Read more

  • Deadly strike on UN shelter in Gaza Strip

    Read more

  • Pope meets with Sudanese Christian woman sentenced to death for apostasy

    Read more

  • Italy’s Nibali cruises to easy victory in 18th stage of Tour de France

    Read more

  • Iraqi parliament elects moderate Kurd as president

    Read more

  • US, European aviation agencies lift travel restrictions to Tel Aviv

    Read more

  • No end to fighting until Israel ends Gaza blockade, Hamas says

    Read more

  • Two foreign women shot dead in western Afghanistan

    Read more

  • At least 60 killed in attack on prison convoy near Baghdad

    Read more

  • Cycling is ‘winning the war on doping,’ says expert

    Read more

  • Ceasefire agreed for Central African Republic

    Read more

  • Can Jew-kissing-Arab selfie give peace a viral chance?

    Read more


Germany reports biggest quarterly slump in 40 years

Latest update : 2009-05-15

Germany's GDP contracted 3.8 percent in the first three month of 2009, representing the biggest fall since records began almost 40 years ago. The Federal Statistics Office explained the contraction was mainly due to a sharp decline in exports.

REUTERS - Slumping exports pushed German gross domestic product (GDP) down 3.8 percent in the first quarter of 2009, a far steeper drop than economists had forecast and the economy's worst performance since reunification in 1990.

The Federal Statistics Office said the quarter-on-quarter contraction, based on preliminary data, was led by a sharp decline in exports and a drop-off in investment.

The world's biggest exporter of goods since 2003, Germany is suffering more than other advanced economies from a collapse in foreign demand.

"This is a dramatic plunge and a worse start to the year than we could have imagined," said Juergen Michels, an economist at Citigroup in London.

"It can't get much worse, but not much better either. It is questionable whether the economy will grow again this year."

The euro fell nearly half a cent against the dollar and German government bond futures ticked higher on the GDP drop, which was far steeper than the 3.0 percent contraction predicted by economists in a Reuters poll.

The government slashed its economic forecast for the full year late last month and now expects a 6 percent contraction, led by a plunge in exports of nearly 19 percent. It is predicting only meagre GDP growth of 0.5 percent next year.

The first quarter contraction was the fourth in a row, the first time since reunification that the German economy has suffered so many consecutive quarters of negative GDP.

It suggested preliminary euro-zone GDP for the first quarter, due on Friday at 0900 GMT, could be worse than the 2.0 percent contraction forecast by economists in a Reuters poll.

Despite the bleak start to the year, policymakers and private sector economists see signs the German and broader euro-zone economies are bottoming out.

Economic sentiment indicators have pointed to a brighter outlook for several months and German manufacturing orders and output data released earlier this month suggested the economy could begin a slow recovery towards the middle of the year.

Government subsidies that encourage Germans to trade in their old cars for new ones have led to a sharp rise in auto purchases in recent months and the VDA car association said on Thursday that a "crash" in worldwide sales was easing.

"For the euro zone itself there are signs we reached the low point in the fourth quarter 2008 and first quarter of 2009," European Central Bank Executive Board member Juergen Stark said in Berlin late on Thursday.

Still, German industry continues to suffer and unemployment is expected to push up near record levels seen in early 2005 next year.

The German chemicals industry said on Thursday it faced its worst slump since the mid-1970s. Financial sources have told Reuters that ailing German tourism and retail group Arcandor is poised to ask the government for up to 700 million euros in loan guarantees.

Fourth quarter GDP, previously the worst quarter on record, was revised down to a contraction of 2.2 percent. Previously, it had reported a decline of 2.1 percent.

Year-on-year, the data showed the economy shrank by 6.7 percent after a 1.7 percent decline in the October-December period. Adjusted for working days, German GDP contracted by 6.9 percent on the year in the first quarter.

The Office is due to publish a detailed breakdown of the first quarter GDP figures on May 26.

Date created : 2009-05-15