Economists Fear Germany on Brink of Recession

Posted January 11th, 2012 at 7:30 am (UTC-5)
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Germany may be on the brink of a recession as the country’s economy contracted by 0.25 percent in the fourth quarter of 2011. Economists fear another down quarter may be in-store for the first quarter of 2012.

The German statistics office announced the economic news Wednesday. Despite the fourth quarter downturn, 2011 saw overall growth of 3 percent, down from 3.7 percent in 2010. The statistics office said the latest growth was spurred by consumer spending and investments. Typically the German economy relies on exports.

Economists at the Deutsche Bundesbank forecast 2012 growth will slow to a meager 0.6 percent unless there are further economic worries within the Euro-zone. By 2013 growth should increase to a rate of 1.8 percent.

The continued Euro-zone debt crises in Greece, Portugal, and Ireland could mean more economic uncertainty within Italy and Spain’s economies.

Only the economies of Sweden, Poland, Finland, and the Baltic States outpaced Germany within the European Union last year.