Survey Among Financial Market Experts - Altogether Rather Low Risk of Recession in Germany

In January, ZEW asked financial market experts to assess the risk of a decline in German GDP in the first quarter of 2012. According to the experts, this risk has increased since the last interview October 2011. But still, the more popular view among the respondents is that there will be at least a small positive growth rate of the German GDP during this year’s first three months. The experts are more optimistic about the second quarter 2012. They consider the ehances of a positive growth of the German GDP higher than for the ongoing first quarter. These are the findings of a survey among approximately 200 financial market experts, conducted by the Centre for European Economic Research (ZEW) in January 2012.

On average the experts estimate a likelihood of 71 per cent that the German GDP will grow during the first quarter 2012. If this comes true, Germany will not slide into a recession for the time being. A recession – speaking in technical terms – does only exist if the quarterly GDP decreases for two consecutive times.

Despite the overall optimistic assessment, the risk of a negative growth rate for the first quarter 2012 has increased. In October 2011 the financial market experts surveyed by ZEW declared on average, that there is a likelihood of 20 per cent that the German GDP will shrink during the first quarter 2012, whereas in the current survey, this risk is estimated to 29 per cent. However, respondents are more optimistic about the second quarter 2012. With 21 per cent the likelihood of negative GDP growth is estimated significantly lower than for the first quarter. The growth for both quarters is estimated clearly less than one per cent. Growth rates of on average 0.21 per cent for the first quarter and 0.33 per cent for the second quarter are seen to be most likely.

For further information please contact

Frieder Mokinski,Phone +49 621/1235-143, E-mail mokinski@zew.de