Posts Tagged ‘german GDP’

German Economy Contracted By 5% In 2009

January 14th, 2010 Comments off

Germany’s Federal Statistics Office  is reporting that the global economic crisis led to a contraction of 5% in the nation’s GDP during 2009. This was by far the worst drop in economic output experienced by Germany since the end of World War II. Major factors in the decline were a sharp falloff in exports due to the collapse in global trade and the constriction of investment activity.

Berlin is projecting growth of up to 1.5% in  2010. Even if this figure holds true, this will still represent a significant long-term contraction in national GDP from peak potential. More importantly, whatever tepid GDP expansion that is occurring is due almost entirely to government stimulus spending. Any trimming of the government’s fiscal pump-priming may send the German economy back into a steep recession. As Germany is the center of economic gravity for the Eurozone, its economic afflictions will undoubtedly impact every other European economy in significant ways.