German economic gloom to deepen

19 March 2009

KIEL: The German economy will contract by 3.7 in 2009 according to the Institute for the World Economy, which has revised down its previous prediction of a decline of 2.7%, made in December last year.

WARC forecasts that the country's total advertising revenues will decrease by around 1% in 2009, after largely static growth last year, as a result of the worsening financial climate.

Like the IfW, the Hamburg Institute of International Economics estimates the German economy will shrink by 3.8% this year, with the global slowdown expected to have a highly detrimental impact on its overall export levels.

Figures released by the German Economics Ministry also show that industrial production fell by 7.5% in January, and ING economist Carsten Brzeski says the sector will "be a huge drag on growth in 2009."

Unemployment also rose for the fourth successive month in February to 7.9%, and the country's government now predicts that the total number of unemployed could reach 3.7 million this year.

Data sourced from Deustche Welle; additional content by WARC staff