Germany's growth forecast goes from bad to worse
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Europe's biggest economy, Germany, is expecting its GDP to shink 6% in 2009. Earlier forecasts were only projecting a 2.25% contraction. The world's top exporter has been badly hit by the slowdown on global demand.
AFP - Germany slashed its growth forecast on Wednesday, foreseeing one of the worst recessions in the developed world with a crunching six-percent contraction this year, but raised hopes of a recovery in 2010.
In its new projections, the government of Europe's biggest economy said that growth was set to creep back into the black next year, with output likely to rise by 0.5 percent in 2010.
The latest estimates are a sharp downward revision from the government's projections published last year, which predicted a contraction of 2.25 percent.
If the six-percent slump is confirmed, only Japan among major economies would suffer a worse recession, with a predicted 6.2 percent decline this year according to the latest projections from the International Monetary Fund.
"The economic decline that we are expecting this year is predominantly the consequence of the massive global slump and the related massive decline in our exports," said Economy Minister Karl-Theodor zu Guttenberg in a statement.
Germany -- the world's top exporter -- has seen demand for its goods dry up as customers around the globe suffer from the financial crisis.
Recent data showed exports plunged by 23.1 percent in February.
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