RSG Admin
11-13-2008, 08:50 AM
By Ralph Atkins in Frankfurt
Published: November 13 2008 08:23
http://www.ft.com/cms/s/0/f5557fa0-b159-11dd-b97a-0000779fd18c.html
Germany has officially plunged into recession after a steeper-than-expected fall in economic activity in the third quarter, dragging down the overall performance of the 15-country eurozone.
Gross domestic product in Europe’s largest economy contracted by 0.5 per cent in the three months to September compared with the previous three months, extending a revised 0.4 per cent fall in the previous quarter, the country’s statistical office reported on Thursday.
The data confirmed the sharp turnaround in Germany’s economic fortunes since the start of the year. Exports, which had powered growth, have gone into reverse amid tumbling demand for German industrial goods. Moreover, tumbling oil prices, lower official interest rates and a softer euro are not expected to bring any early relief.
Forward-looking economic indicators, including for industrial orders, offer little prospect of a rebound until well into next year – raising the prospect of a downturn across Europe on a scale not seen since the early 1990s...
...Private sector economists believe further ECB interest rate reductions will follow in 2009. Ken Wattret, European economist at BNP Paribas, said he expected the eurozone to contract by 1 per cent next year. Eurozone inflation was also tumbling fast and could fall below 1 per cent next year – allowing the ECB to cut interest rates as low as 1 per cent by mid-2009, he predicted. “Economic activity in the eurozone is collapsing, with weakness broad based across sectors and national economies,” Mr Wattret said.
Published: November 13 2008 08:23
http://www.ft.com/cms/s/0/f5557fa0-b159-11dd-b97a-0000779fd18c.html
Germany has officially plunged into recession after a steeper-than-expected fall in economic activity in the third quarter, dragging down the overall performance of the 15-country eurozone.
Gross domestic product in Europe’s largest economy contracted by 0.5 per cent in the three months to September compared with the previous three months, extending a revised 0.4 per cent fall in the previous quarter, the country’s statistical office reported on Thursday.
The data confirmed the sharp turnaround in Germany’s economic fortunes since the start of the year. Exports, which had powered growth, have gone into reverse amid tumbling demand for German industrial goods. Moreover, tumbling oil prices, lower official interest rates and a softer euro are not expected to bring any early relief.
Forward-looking economic indicators, including for industrial orders, offer little prospect of a rebound until well into next year – raising the prospect of a downturn across Europe on a scale not seen since the early 1990s...
...Private sector economists believe further ECB interest rate reductions will follow in 2009. Ken Wattret, European economist at BNP Paribas, said he expected the eurozone to contract by 1 per cent next year. Eurozone inflation was also tumbling fast and could fall below 1 per cent next year – allowing the ECB to cut interest rates as low as 1 per cent by mid-2009, he predicted. “Economic activity in the eurozone is collapsing, with weakness broad based across sectors and national economies,” Mr Wattret said.