German Chancellery Also Sees Mild Recession, Spiegel Reports
German Chancellery Also Sees Mild Recession, Spiegel Reports
(Bloomberg) --
The German Chancellery now also expects Europe’s largest economy to slip into a mild recession in the third quarter, news magazine Der Spiegel reports on Friday.
Gross domestic product contracted by 0.1% in the second quarter, and Angela Merkel’s economic advisers expect a similar result in the period between July and September.
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Conventionally, two consecutive quarters of economic contraction would be considered a technical recession.
The chancellery declined to comment but referred to a news conference earlier on Friday when an economy ministry spokeswoman said Germany is not in a recession.
While contingency measures are being prepared, central bankers and government officials agree that it’s premature to launch a stimulus package now. Berlin still expects a recovery toward the end of the year.
Germany is prepared to defend its adherence to a balanced budget policy if it were challenged at a leaders meeting at the Group of Seven major economies in Biarritz, France, a senior government official in Berlin said on Friday.
The economic slowdown from over 2% in 2016 and 2017 has prompted calls by business leaders and politicians for the Merkel administration to open the purse strings.
--With assistance from Arne Delfs and Birgit Jennen.
To contact the reporter on this story: Raymond Colitt in Berlin at rcolitt@bloomberg.net
To contact the editors responsible for this story: Ben Sills at bsills@bloomberg.net, Paul Gordon
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