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Monday 23rd of February 2009
November 13, 2008

Europe’s largest economy in recession


by Kay Murchie
”Europe’s

Official figures show that Germany, Europe’s largest economy, is now in recession after gross domestic product (GDP) fell by 0.5% in the third quarter.

Figures from the Federal Statistics Office said that this is the second quarter in a row that the economy has contracted after a 0.4% fall in the second quarter.

A country is considered to be in recession when it experiences two consecutive quarters of negative growth.

The Federal Statistics Office said a negative effect on GDP came from foreign trade, with a strong increase in imports and weakening exports.

During the 12 months to September, German GDP rose by 1.3%, against annual growth of 3.3% in the previous period.

Last month, leading economic think tanks reported that Germany was close to recession. The four institutes, Ifo in Munich, IfW in Kiel, RWI in Essen and IWH in Halle, said that the German economy will only expand by 0.2% next year after revising their growth forecast.

The first European country to fall into recession was Ireland, with Germany close behind. The UK is set to be next on the list after the Bank of England’s Inflation Report revealed that GDP is expected to fall by 2% next year.

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