BERLIN (MNI) – The German Bank Association (BDB) expects that
German GDP grew at best only slightly in the first quarter of the year,
yet noted that the economic outlook has brightened over recent weeks.
“By spring at the latest, economic growth should noticeably pick
up,” the association predicted in its latest monthly report released
Tuesday. The BDB pointed to the continued improvement of sentiment
indicators as well as to seasonal catching-up effects in the
construction industry after the harsh winter.
“The somewhat more friendly outlook is also supported by a
continued pick up of the global economy,” the report stated. Still, the
BDB warned not to become overly optimistic and reaffirmed its
“relatively cautious” forecast for German GDP growth of 1.5% both this
year and next.
The world wide massive economic stimulus measures will run out over
the coming months, the association remarked. “Thus, not only Germany but
the whole global economy now faces the question if a more or less smooth
transition to a recovery supported by private demand will be achieved,”
it said.
Moreover, consolidation measures underway in highly indebted
Eurozone member states will also have a dampening effect on the German
economy, the BDB asserted.
On the domestic front, low capacity utilisation rates will curtail
investment plans of businesses still for a long time, the association
predicted.
Furthermore, “for the German labor market one cannot yet sound the
all-clear,” the BDB cautioned. The unexpected positive development of
unemployment numbers over the past months is partly due to statistical
changes, the report noted.
“In the further course of the year one has still to expect rising
unemployment even though [an increase to] way over 4 million is not to
be feared anymore,” the association said.
–Berlin bureau: +49-30-22 62 05 80; email: twidder@marketnews.com
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