Germany's economy, the largest in Europe, will weaken "noticeably" during the winter months as companies hold back on investments due to the euro-zone crisis, Germany's economics ministry said Friday.
"Overall, there will be a noticeably weaker economic dynamic in the winter half-year," the ministry wrote in its monthly analysis of the economic outlook, noting that risks remain "significant."
Companies are likely to be wary of making investments after September's drop in industrial orders, the ministry said.
Economic data and surveys are increasingly signalling a sharp slowdown in Germany.
Weakness in the key industrial sector was illustrated this week by a 3.3% drop in manufacturing orders in September from August, and a 1.8% drop in industrial output over the same period.
Meanwhile, last month's closely watched Ifo survey showed German business confidence fell to its lowest level in almost three years.
On Wednesday, the European Commission slashed its forecast for German economic growth next year to 0.8% from 1.7%, warning of weakness among key trading partners and debt crisis-related uncertainty.
Germany's economic weakness is likely to prove temporary, the economics ministry said Friday, pointing to robust private consumption and a likely revival in global growth next year.
The economy is also likely to have expanded slightly in the third quarter, it added.
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"Overall, there will be a noticeably weaker economic dynamic in the winter half-year," the ministry wrote in its monthly analysis of the economic outlook, noting that risks remain "significant."
Companies are likely to be wary of making investments after September's drop in industrial orders, the ministry said.
Economic data and surveys are increasingly signalling a sharp slowdown in Germany.
Weakness in the key industrial sector was illustrated this week by a 3.3% drop in manufacturing orders in September from August, and a 1.8% drop in industrial output over the same period.
Meanwhile, last month's closely watched Ifo survey showed German business confidence fell to its lowest level in almost three years.
On Wednesday, the European Commission slashed its forecast for German economic growth next year to 0.8% from 1.7%, warning of weakness among key trading partners and debt crisis-related uncertainty.
Germany's economic weakness is likely to prove temporary, the economics ministry said Friday, pointing to robust private consumption and a likely revival in global growth next year.
The economy is also likely to have expanded slightly in the third quarter, it added.
nasdaq.com
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