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Berlin - Germany’s upbeat consumers will continue to support the economy and provide the basis for growth, which should peak next summer after a slowdown in the months ahead, the finance ministry said on Thursday in its monthly report.
The view builds on reports tracking consumer morale, which held steady going into January and resisted an expected fall as income expectations and views of the economy improved despite a softening of households’ willingness to make major purchases.
“Consumers’ uncertainty at the eurozone debt crisis has not, for now, turned into any reluctance to spend, and another drop in the willingness to save underlines this,” the ministry wrote.
The economy, Europe’s largest, recovered faster than its peers from the depths of the 2008 financial crisis, but some economists worry it could fall briefly into recession as Europe’s debt woes dampen demand in some of its key export markets in the coming months.
Recent data showed German exports falling in October at their sharpest rate in half a year, raising the prospect of businesses cutting back investment in anticipation of a slowdown.
“Current economic data point to a clear weakening of the economy in the months ahead,” the ministry said. “Meanwhile a slower pace is evident, particularly in industry.”
The government estimates the economy will grow around 1 percent in 2012, although some major researchers are forecasting lower expansion -- the Ifo institute expects only 0.4 pe, eurrcent growth and the trade union-linked IMK even sees a 0.1 percent contraction.
Despite the concerns, Germany’s public coffers continue to rake in more money compared to last year. In November, strengthened payroll tax revenues helped boost the tax take to 38 billion euros -- 7.6 percent higher than the same month in 2010.
Germany’s efforts to consolidate public finances remain “pressing”, deputy finance minister Joerg Asmussen said in an introduction to the report, even though uncertainties in the world economy raise budgetary risks.
“The weakening economy, possible changes to interest rates, and also further measures to fight the sovereign debt crisis in some states raise considerable risks to the federal budget,” he added.
The view builds on reports tracking consumer morale, which held steady going into January and resisted an expected fall as income expectations and views of the economy improved despite a softening of households’ willingness to make major purchases.
“Consumers’ uncertainty at the eurozone debt crisis has not, for now, turned into any reluctance to spend, and another drop in the willingness to save underlines this,” the ministry wrote.
The economy, Europe’s largest, recovered faster than its peers from the depths of the 2008 financial crisis, but some economists worry it could fall briefly into recession as Europe’s debt woes dampen demand in some of its key export markets in the coming months.
Recent data showed German exports falling in October at their sharpest rate in half a year, raising the prospect of businesses cutting back investment in anticipation of a slowdown.
“Current economic data point to a clear weakening of the economy in the months ahead,” the ministry said. “Meanwhile a slower pace is evident, particularly in industry.”
The government estimates the economy will grow around 1 percent in 2012, although some major researchers are forecasting lower expansion -- the Ifo institute expects only 0.4 pe, eurrcent growth and the trade union-linked IMK even sees a 0.1 percent contraction.
Despite the concerns, Germany’s public coffers continue to rake in more money compared to last year. In November, strengthened payroll tax revenues helped boost the tax take to 38 billion euros -- 7.6 percent higher than the same month in 2010.
Germany’s efforts to consolidate public finances remain “pressing”, deputy finance minister Joerg Asmussen said in an introduction to the report, even though uncertainties in the world economy raise budgetary risks.
“The weakening economy, possible changes to interest rates, and also further measures to fight the sovereign debt crisis in some states raise considerable risks to the federal budget,” he added.
