|
||||||||
  |
||||||||
|
||||||||
|
||||||||
|
||||||||
|
||||||||
|
|
|||||||||||||||||||||||||||||||||||||||||||||
German growth remains weak
FRANKFURT, Germany -- Growth in Germany continues to stagnate as Europe's largest economy struggles to recover after slipping into recession in the second half of last year. Gross domestic product rose by just 0.3 percent in the third quarter from the previous three-month period, as a slight increase in consumer spending was outweighed by a decline in business investment, the Federal Statistics Office said on Thursday. The pace of expansion was only slightly better than in the second quarter, which the statistics office said had been revised down to 0.2 percent.
Compared to a year earlier, the economy grew by 0.4 percent in the third-quarter, the office said. "On the whole the data shows that growth had not accelerated," Rainer Guntermann, an economist at Dresdner Kleinwort Wasserstein, told Reuters. "Growth won't be much better in 2003, but I don't think we'll see a recession, more a stabilisation at low levels.'' Private consumption increased by 0.5 percent in the third quarter compared to a revised 0.1 percent rise in the previous quarter, the statistics office said. Investment in equipment and machinery declined by 1.1 percent after a revised 0.7 percent drop in the second quarter. The government's numbers were in line with economic data released earlier week showing that Germany continues to be hampered by weak growth. On Monday, the Bundesbank said GDP expanded by just 0.25 percent between July and September, compared to 0.3 percent expansion in the previous two quarters. That puts year-on-year growth at 1 percent. "The German economy in the summer months has continued on the moderate growth path that it entered at the start of the year after overcoming the contraction phase of the second half of 2001,'' the Bundesbank said in its November monthly report. "We cannot see an end to investment hesitancy.'' The central bank placed much of the blame for the sluggish economy at the feet of the government, saying the newly elected coalition led by Chancellor Gerhard Schroeder was not acting aggressively enough to spur growth. Schroeder is considering raising capital gains tax and plugging exemption holes that apply to equity and real estate investments, while at the same time reducing public spending. "It [the government] should be investigating whether there shouldn't be a stronger use of measures that predominantly touch consumptive government spending, rather than the primary investment activity crucial to long term growth perspectives,'' the bank said. Germany -- once the engine of the European economy -- slid temporarily into recession in the second half of last year. It has been sputtering to regain growth as the global slowdown continues to dent exports, reduce prices for products and cut into corporate profits. At the same time, as stock markets plunge, many companies have had to accelerate spending cuts and layoffs -- pushing Germany's employment rate to almost 10 percent. The government has revised its 2003 budget deficit to nearly 19 billion euros and run afoul of the European Union for exceeding the deficit ceiling for eurozone members of 3 percent of GDP. The Bundesbank's estimate of GDP expansion is a preview to the government's own growth numbers to be released on Thursday. Analysts polled by Reuters expect the government figure to show 0.3 percent quarter-on-quarter growth between July and September.
|
|
|||||||||||||||||||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||||||||||||
