Bloomberg News

IMF Cuts Germany 2012 Growth Forecast as Europe Recession Looms

January 24, 2012

Jan. 24 (Bloomberg) -- The International Monetary Fund cut its forecast for growth this year in Germany, Europe’s largest economy, by one percentage point as it predicted a recession in the region.

German gross domestic product will rise by 0.3 percent in 2012, the IMF said in its world economic outlook published today. That contrasts with the 1.3 percent growth it forecast on Sept. 20, and with the 0.6 percent forecast by the Bundesbank in December. The IMF said the German economy will expand by 1.5 percent in 2013.

“We see no need to revise our forecasts at this time,” Bundesbank spokesman Magnus Makela said by telephone, commenting on the IMF report.

The euro area may enter a “mild recession” this year and contract 0.5 percent compared with a previous estimate of 1.1 percent expansion, the IMF said. The Washington-based fund also cut its forecasts for global growth.

--Editors: Craig Stirling, Leon Mangasarian

To contact the reporter on this story: Jeff Black in Frankfurt at jblack25@bloomberg.net

To contact the editor responsible for this story: Craig Stirling at cstirling1@bloomberg.net


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