Wednesday, October 7, 2009

Europe's Leading Economy began to Recover

Germany EconomyOrders for industrial goods from Germany rose for the sixth consecutive month, data showed Wednesday, October 7, 2009, it provides new evidence that Europe's leading economy began to recover from its worst in 60 years. Germany, one of the world's leading exporters affected by the global economic crisis because the demand for goods "made in Germany" declined dramatically, but the government has become more "bullish" about prospects for recovery. On Tuesday, a government spokesman told AFP, saying that the economy is expected to shrink by between 4.0 to 5.0 percent this year, a revision of previous estimates rise between 5.0 and 6.0 percent.

Meanwhile, the economy ministry said Wednesday that German industrial orders rose a better-than-expected 1.4 percent in August from July, after rising 3.1 percent the previous month. "This means that the German economy is set to show strong growth in the second half of the year and even get a broad recovery in the moment," said Commerzbank analyst Ralph Solveen, interpreting the data. Carsten Brzeski, of ING, said that with weak private consumption, the manufacturing sector needs to take over the club as the main driver of economic growth. "Today's figures show that this hope can become a reality," he added.

International institutions are also becoming more bullish on the prospects for economic powerhouse of Europe. The International Monetary Fund (IMF) recently revised up his views on Germany, projections of output contraction of 5.3 percent in 2009. European Central Bank also dramatically increase the estimates for the 16-nation euro zone recently, because the major German trading partners of Europe began to emerge from the depths of recession. Domestic demand also began to appeal to the German economy.

Consumer confidence index has risen for five consecutive months and indicators Ifo business confidence is monitored closely achieve the highest level for a year in September. Unemployment did not rise sharply because economists worried about the rise of the crisis, even fell in September to 8.0 percent, although experts predict the rising unemployment in the next few months. In August, Germany is officially out of recession with a 0.3 percent growth recorded in the second three months of this year.

A recent survey by consultants AlixPartner showed that only one out of four Germans who said their personal financial situation has deteriorated because of the crisis, compared with nearly half of those surveyed in the UK and in Italy. However, the challenges ahead of Chancellor Angela Merkel and her new pemerintan, coalition partners pro-business Free Democrats, can not be underestimated. Unemployment is expected to rise sharply in coming months and Germany sit on a mountain of debt. "The biggest problem and the obstacles still to come," analysts from Unicredit said in a research note recently.

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