Post date: Dec 16, 2008 3:35:29 PM
Frankfurter Allgemeine has cracking scoop this morning, having obtained an internal memo from the economics ministry, which expects a slump in growth of more than minus 3 per cent for next year, by far the worst economic decline in German post-war history. The ministry plans to make this forecast official in its annual economic report, due out January.
Worse still, the decline in the present quarter is estimate at 1.25-1.75%. Note these are actual, not annualized figures.
When confronted with those data, the government spokesman presented his usual complacent interpretation. One should not overestimate those figures, he said, given the lack of experience of this type of crisis. The newspaper said there will be a new stimulus, but the focus will be on infrastructure investment (meaning not in time for 2009). Der Spiegel quotes a member of the government of said that the next programme would have a size of at least €20bn, which is less than 1% of GDP. (So even if confronted with an economic slump, Germany is not going to support the economy beyond some token gestures)