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Is euro zone’s biggest economy, Germany heading for a crash?

Looks like German’s heady days of rapid economic growth may be over, German’s GDP rose only 0.2% in the third quarter from 0.3% in the second quarter. Germany is the euro zone‘s biggest economy and the world’s third largest exporter with $1.408 trillion exported in 2011.

According to International Monetary Fund (INF), the world economy will grow 3.3 percent this year, the slowest since the 2009 recession, and 3.6 percent next year.

Do you think, German’s heady days of rapid economic growth may be over?

But amidst a growing debt crisis in Europe and a fragile recovery in the United States of America, there is growing evidence that Germany’s economy is probably shrinking. The growth in German economy was as previously estimated and therefore did not have a significant impact on Euro trading in currency markets.

Most analysts, however, don’t worry. They believe Germany’s problems are temporary, Munich-based Ifo economic institute said its business climate index, based on a survey of 7,000 executives, climbed to 101.4 from 100 in October for its first gain in 8 months.

“Businesses are investing less in machines and other equipment. The only explanation for that is a crisis of confidence – which means the German economy will lose more speed,” said Holger Schmieding of Berenberg Bank.

“The tough savings measures in southern Europe, weaker growth in China and uncertainty over the euro crisis are all contributing factors,” said Schmieding.

  • Germany is 4th GDP (nominal) and 5th GDP (PPP) in the world.
  • euro-zone gross domestic product fell 0.1% in the third quarter.
  • On an annual comparison, Germany’s GDP rose 0.9% in the third quarter.
  • France, Germany’s largest export destination, lost its top credit rating at Moody’s Investor.
  • Domestic demand as a whole was unchanged on the quarter and had no
  • impact on GDP growth in 3Q.
  • Exports climbed 1.4% on the quarter, while imports rose 1.0%.
  • Industrial orders fell to multi-year lows in September.
  • Forward-looking indicators suggest GDP growth will slow further in
  • 4th quarter.
  • The German government currently expects growth of 0.8 per cent for 2012 and one per cent next year.

image by Lance Shields, EPP and dirk.

Unlike most of its recession-wracked partners in the 17-nation eurozone, Germany has until now escaped. But, as German economy’s rate of expansion continued to drop, so what are the prospects for Economy of Germany?

About the AuthorProfessional

Amarendra is the Chief Executive Officer and Editorial Director at CEOWORLD Magazine, and is responsible for all business management, company operations, finance, and social advertising operations.

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