IFO’s Abberger says cannot conclude that economic recovery is sustainable

Ifo economist Klaus Abberger feels that although economic difficulties are easing across the board in Germany, it’s still too early to conclude that a recovery is sustainable.

Global economic stimulus programmes were the main drivers of Germany’s surprise emergence from recession in the second quarter, Abberger says, but it’s unclear whether this boost will provide lasting support. He expects only moderate growth in 2010 and over the medium term.

According to Abberger, German companies are no longer sceptical about export opportunities and the strong euro is not seen as a problem.

Unemployment is seen headed higher in Autumn 2009 and into 2010, but not going over 5 millon.

Abberger sees ECB interest rate at 1% being appropriate.