Germany faces a cooling economy, not a recession, as the euro region’s sovereign debt crisis hurts business sentiment, the BGA business association, which represents exporters, wholesalers and services companies, said today in an e-mailed statement.
“We won’t fall off a cliff, 2009 won’t repeat itself,” BGA president Anton Boerner said in a speech prepared for delivery in Berlin today. The economy will expand at a “flatter” trajectory without falling into a recession, he said.
German services companies will increase sales by 2 percent to 721 billion euros ($904 billion) this year and expand by around 2.25 percent to 737 billion euros in 2013, the BGA said, citing its own forecast together with the Creditreform credit- rating company. That outlook is based on economic growth of 0.8 percent in 2012 and an expansion “just above” 1 percent next year, the BGA said.
German economic growth slowed to 0.3 percent in the second quarter from 0.5 percent in the first as the debt crisis damped demand for exports and prompted companies to postpone investments. While sales to faster-growing markets outside Europe and domestic spending are helping to insulate Germany from the turmoil, the Bundesbank said last week that the prevailing uncertainty may cause the economy to cool further.
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