Global slump in German GDP, whatﾒs next ?
- The first-quarter collapse in GDP (-3.8% q/q) can be explained by a further marked drop in exports and investment.
- Ongoing moves by firms to run down inventories and disinvest could lead to another contraction in activity in the second quarter.
- The necessary shift in growth towards household consumption is being jeopardised by the rise in unemployment. No swift return to growth potential seems likely before 2011.