Germany Predicts Economy To Be At World War II Levels

A forecast conducted on Thursday by the German government predicts their economy will shrink by 2.25 percent in 2009. Such a performance from the German economy, the biggest economy in Europe, would be the worst since World War II. This is a very different prediction than one made in October, which showed 0.2 percent growth.

Much of this overall economic decline is due to a sharp decline in the export market. Germany is one of the world’s leading exporters and, according to Thursday’s report, will see a drop in the market by 8.9 percent over the course of the year. The country is also expected to average 8.4 percent unemployment, an increase from 7.8 percent in 2008, and to decrease its domestic demand by 0.1 percent.

Economy minister Michael Glos told reporters, “there is no precedent in postwar history for this economic decline that we unfortunately have to forecast.” As one of the world’s biggest exporters “we have profited greatly from the upswings in the world economy and obviously, when things go the other way, we are an economy that is particularly affected,” Glos said.

To help combat the struggling German economy, the government created a new 50 billion euro stimulus package last week. This will be added to an earlier package of 23 billion euros.

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