Ifo Economic Forecast 13 December 2012 Ifo Economic Forecast 2012/2013: Euro Crisis Delays Upturn
The German economy looks set to contract in the fourth quarter of 2012, before staging a recovery that is expected to be modest initially in 2013. These are the indications of the Ifo Business Climate Index, which recently rose clearly after showing no signs of any upswing in the previous months. The euro crisis is responsible for the poor economic situation at present. Real gross domestic product, at a 2/3 uncertainty interval of -0.6 % to 2.0 %, should therefore only in-crease by 0.7 % on annual average in 2013. Boosted by domestic demand, the economy looks set to pick up again in the year ahead, as long as the European debt crisis does not escalate any further. However, no significant growth in employment is expected during this period.