With most of Europe in a nasty recession, and significant parts of it (Spain, Greece, Cyprus, Italy) in an outright economic depression, I wonder why it took so long for the IMF to Reduce Germany GDP Forecast.
Germany’s 2013 growth prospects have been cut in half by the International Monetary Fund, as it warned that the outlook for Europe’s strongest economy could worsen if a eurozone recovery fails to materialise.
The IMF said falling business investment and the eurozone’s ongoing recession, which have hampered German growth, meant the economy would grow by just 0.3pc this year, compared with an April estimate of 0.6pc.
“The uncertainty, mainly surrounding prospects for the euro area and the ongoing recession in the region, have led to declining German exports to the region as well as a sharp pull back in business investment,” the IMF said in a report on Monday.
Ridiculous Talk of Uncertainty
Note the ridiculous talk about “uncertainty”. What is certain is the IMF is in la-la land, attempting to paint a picture that does not exist.
It is all but 100% certain that a eurozone recovery is not coming, so warning that the outlook for growth “could worsen if a eurozone recovery fails to materialise” is like warning that it might hurt if you are punched in the nose by a professional boxer with full force.
Note too that Germany Q1 GDP Grew At 0.1%, missing expectations. That report came out on May 15, and the IMF just now figured out that German growth is slowing.
Given that Germany is headed for contraction, the IMF is still too optimistic.
Mike “Mish” Shedlock
http://globaleconomicanalysis.blogspot.com