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(CEP News) Frankfurt - The German Economics Ministry has revised its growth forecasts and now expects the economy to contract by 6% in 2009, its sharpest fall since reunification.
The previous forecast issued by the government had suggested a less pronounced contraction of 2.25% for the year. Speaking in Berlin following the German government's updated economic forecast release, German Economics Minister Karl-Theodor zu Guttenberg called the growth forecasts "realistic" and "pragmatic". According to the forecasts, the economic decline would be led by exports, which are projected to fall 18.8% this year. Imports are also expected to lose ground, with projections pointing to a decline of 10.6%. The government also expects private consumption to fall 0.1% over the year, while investment levels are projected to slide 8.1%. Consumer prices are expected to see a modest growth rate of 0.3% for the year. Looking ahead, the Ministry expects the economy to post a modest recovery of 0.5% in 2010, thanks to government stimulus plans and improving foreign demand, which would help export growth. "With its two economic stimulus programs, Germany has made an effort that's exemplary at the international level and damps the downturn at the national level," zu Guttenberg said. Written by CEP News European Staff,
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