In its’ March monthly report, the German Finance Ministry says the German economic contraction likely accelerated in the first quarter of this year. In the Q-4 2008 the German economy contracted 2.1%, its worst quarter since reunification in 1990.
In its report the ministry said “The majority of the current economic indicators show a further deterioration in the situation compared to the fourth quarter of 2008″ adding “the indicators point to an acceleration in the decline in gross domestic product in Q-1 2009.”
The ministry feels the outlook for industrial production is “very bad”, adding that it expected unemployment to rise further in the coming months. The February tax take fell a hefty 6% on the year.
Meanwhile the Financial Times Deutscheland newspaper, citing internal government calculations, reports that the government expects the economy to contract by up to 5% this year. The governments’ official forecast for 2009 is presently for a contraction of 2.25%.
All sobering stuff.