Recovery likely to be moderate in Germany: IMF

The IMF said gross domestic product (GDP) in Europe's largest economy would grow 1.5 per cent in 2010. (AFP)

Germany's economic recovery is likely to be moderate and there are risks predominantly to the downside, the International Monetary Fund said in a report.

"Muted euro area expansion and the restraint of US consumers will limit Germany's export growth despite a still comfortable competitiveness position," the IMF added in a statement after conducting a review, known as an Article IV consultation, of Germany.

The IMF said gross domestic product (GDP) in Europe's largest economy would grow 1.5 per cent in 2010, and 1.9 per cent in 2011, but growth could also be lower due to setbacks to global trade or the domestic financial system.

Germany was hit especially hard by the global crisis last year, when the economy shrank by a record five per cent, as it is heavily dependent on foreign trade for growth.

The German government last month raised its 2010 growth forecast to 1.4 percent from a previous estimate of 1.2 per cent, while many private institutes are forecasting 2010 growth of two per cent.

 

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