Thursday, 12 January 2012

Germany's economy shrinks, US economy expands

Germany may be on the brink of recession, reports Bloomberg:

Germany may be on the brink of recession after the sovereign debt crisis caused the economy to contract in the final quarter of 2011.

Europe’s largest economy shrank “roughly” 0.25 percent in the fourth quarter from the third, the Federal Statistics Office in Wiesbaden said today in an unofficial estimate. Economists such as Christian Schulz at Berenberg Bank expect gross domestic product to contract again in the current quarter. A recession is defined as two consecutive quarters of declining GDP.

While the euro area's largest economy may be on the brink of recession, the world's largest economy appears to be still growing. According to the Federal Reserve's beige book released on Wednesday, the US economy “expanded at a modest to moderate pace” from late November through the end of December.

Earlier on Wednesday, a report from Japan showed that its economy may have slowed towards the end of 2011. The Cabinet Office's index of coincident economic indicators fell 1.1 points in November. Encouragingly, however, the index of leading economic indicators rose 0.9 point in November.

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