The German economy fell deeper into recession in the first quarter of 2009, the Bundesbank said on Monday, further fuelling expectations of a record contraction in gross domestic product (GDP) to start the year. In the fourth quarter of 2008, the German economy contracted at it fastest quarterly pace since reunification in 1990, and last week the economy ministry said it expected the first quarter of this year to show a steeper fall.
"The recessionary trend has intensified further in the first quarter of 2009 after real quarterly GDP fell 2.1 percent in the fourth quarter of 2008 in seasonally adjusted terms," the Bundesbank said in its April report. The statistics office is due to release first quarter GDP data on May 15.
The Bundesbank said preliminary first quarter data showed weakness in exports - the key reason for the economy's woes at the end of 2008 - was having a rising impact on domestic economic drivers. It pointed to sharp cuts in capital equipment outlays by companies, the impact of poor winter weather on construction and inventory pressures. "Private consumption, on the other hand, had a stabilising effect on the economy in the first quarter."
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