Germany's central bank warned Monday that Europe's
biggest economy faces slowing growth in the run-up to the end of the
year amid recession and fiscal austerity in the eurozone.
"There are growing signs that a clear expansion of economic
activity in the third quarter 2012 could be followed by stagnation or
even a slight decline of gross domestic product in the final quarter
of the year," the Bundesbank wrote in its October bulletin.
The bank said demand from Germany's key trading partners in the
17-eurozone had undergone a massive decline, and demand from nations
such as the United States and China had also stalled as a slowdown in
growth emerged in the world's leading economies.
"Surveys are also reflecting the gloomy outlook for exports and
uncertainty about the prospects for global economic developments,"
the Bundesbank said.
The release of the Bundesbank's latest monthly bulletin coincided
with a report from the nation's Finance Ministry also warning that
the nation's growth could lose momentum as the year comes to an end.
But the ministry report also said German tax revenues surged 4.2
per cent year-on-year to a record high in September as a solid labour
market, strong corporate earnings and a pickup in economic growth
helped boost the state's coffers.
The ministry said tax revenue booked by both the federal
government and the country's 16 state governments climbed to 50
billion euros (65.2 billion dollars) last month.
Tax collections rose 5.6 per cent in the first nine months
compared with the same period last year, raising the prospect of the
total tax take for the year climbing to more than 600 billion euros.
"It is likely overall economic activity increased in the third
quarter," the ministry's report said.
But it warned the nation could face "a significant economic
weakening" in the final quarter of the year amid recession and fiscal
austerity in the eurozone.
The solid state of Germany's state finances contrasts with that of
many others in the currency bloc, which are struggling to boost
revenue and slash government spending in a bid to cut high
debt-and-deficit levels.
At the same time, another study released Monday and comparing
Germany's industrial performance underlined the major role played by
manufacturing in helping Europe's biggest economy to withstand the
euro debt crisis and a slowing global economy.
The study of 45 industrialized nations, drawn up by the
Cologne-based Institute for the Economic Research (IW), found that
Germany now ranked number five as an industrial centre.
This compared with between 1995 and 2010 when it held the ninth
ranking. Topping the survey's results were the US, Sweden, Denmark
and Switzerland.
Commissioned by the German Economics Ministry, the survey's
results were based on a total of 58 indicators to decide on a
country's ranking.
However, the survey also warned that Germany faced several key
industrial problems including high labour costs and a growing
shortage of skilled labour.
