With the ECB not lowering the interest rate too much and a low oil demand, at least the prices remain stable and keep the domestic demand somewhat alive.
German March Inflation Rate Falls to Lowest in Almost 10 Years
Germany’s inflation rate fell to the lowest level in almost ten years in March after oil prices dropped and the deepening recession eroded demand.
Inflation, calculated using a harmonized European Union method, slowed to 0.4 percent from 1 percent in February, the Federal Statistics Office in Wiesbaden said today, confirming a March 27 estimate. The March rate is the lowest since June 1999. From a month earlier, prices fell 0.2 percent.
German Industrial Output Fell for a Sixth Month in February
April 9 (Bloomberg) -- Industrial production in Germany, Europe’s largest economy, dropped for a sixth month in February as the global recession sapped demand for goods at home and abroad.
Output fell a seasonally adjusted 2.9 percent from January, when it slumped 6.1 percent, the most since data for a reunified Germany began in 1991, the Economy Ministry in Berlin said today. Economists expected a decline of 3 percent, the median of 30 forecasts in a Bloomberg survey showed. From a year earlier, output collapsed 20.6 percent.
A global slump in demand has forced German companies to scale back production and cut jobs, pushing the economy into its worst recession since World War II. The government has pledged 82 billion euros ($109 billion) to stimulate growth, while the European Central Bank has signaled it will cut interest rates to a fresh record low.
“Industrial production is still suffering from the poor order situation, in particular from abroad” said Simon Junker, an economist at Commerzbank AG in Frankfurt. “We don’t expect a recovery before the second half of the year, when the economic stimulus packages and the decline in interest rates should kick in.”
The ministry revised last month’s decline in output from an initially-reported 7.5 percent. This month’s drop was led by a 4.5 percent slump in production of investment goods, the Economy Ministry said. Construction output rose 1.9 percent from January.
Manufacturing orders plunged 38 percent in February from a year earlier, exports dropped for a fifth month, and German business confidence fell to the lowest level in more than 26 years in March. The economy may shrink as much as 5.3 percent this year before a “slow” recovery in 2010, according to the Organization for Economic Cooperation and Development.
Latest indicators suggest “that the decline in gross domestic product in the first quarter of 2009 could be even stronger than in the last quarter of 2008,” when the economy contracted 2.1 percent, Bundesbank President Axel Weber said last week. “That’s why we have to expect a considerable decline in GDP in 2009 overall.”
Bayerische Motoren Werke AG, the world’s biggest maker of luxury vehicles, yesterday said March deliveries fell 17 percent. German auto-parts company ElringKlinger AG expects the first decline in sales in at least a decade. Chief Executive Officer Stefan Wolf said last week he had “never seen anything like this.”
The ECB expects the euro-region economy, which takes just over 40 percent of German exports, to contract about 2.7 percent in 2009. The central bank has cut its benchmark lending rate to a record low of 1.25 percent and signaled another reduction is likely in May.
I doubt it and you are making one very big generalisation and if you are prepared to look , there are just as many economists that are confident in Americas future. Its taken some serious pounding, but its economy is still three times plus larger than any other country, andthe resilence of its people with its proven ability to innovate, it will still lead the world for most of this century.USA's economic glory has ended, soon will its military power.
Why did I conclude like this? Because their very foundation of their financial institutions are all shattered. Many industries are falling down. This is an alarming situation considering they are the one championing capitalism and these are vital sectors of their economy in sustaining their wealth.