The German economy is going through a “temporary phase of weakness” and may rebound after the first quarter of next year, the Finance Ministry said in its monthly report, citing published data.
Releases including those by Munich’s Ifo institute suggest there is “a good chance that the economic driving forces will become stronger again after the economic downturn in the winter half-year,” the Berlin-based ministry said.
Industry and trade figures show that the economy had an “unfavorable” start to the final quarter of 2012, the ministry said. Tax revenue rose 0.5 percent from a year ago in November whereas 11-month revenue was 5 percent higher than in the same year-earlier period, it said.
The Bundesbank said this week it expects the German economy to grow next year after a contraction in the fourth quarter amid weaker demand from the 17-nation euro bloc, which is battling recession after governments cut spending to curtail deficits.
The Ifo institute’s business climate index, based on a survey of 7,000 executives, climbed to 102.4 from 101.4 in November. A measure of executives’ expectations rose to 97.9, the highest since May, from 95.2 in November.
The ZEW Center for European Economic Research in Mannheim said Dec. 11 its index of investor and analyst expectations, which aims to predict economic developments six months in advance, climbed to 6.9 from minus 15.7 in November.
Net new borrowing by the federal government will probably drop below 25 billion euros ($33 billion) this year, beating a target of 28.1 billion euros in the second supplementary budget, the ministry said in the report.
To contact the reporter on this story: Rainer Buergin in Berlin at firstname.lastname@example.org
To contact the editor responsible for this story: James Hertling at email@example.com