German economy to shrink less than expected in 2009

Germany's economy should contract less than the government's estimate of six percent in 2009 after upbeat data for the second quarter, an expert has told Der Spiegel weekly. A 5.5 percent contraction is more likely after second-quarter figures released this week showed unexpected growth of 0.3 percent, Kai Carstensen of the Ifo economic research institute says in next week's edition.
He added that the third quarter could see growth of 0.5 percent. As for next year, Carstensen said a return to growth was likely. Joachim Scheide from the IfW research institute said "we will fluctuate just above zero throughout next year." Germany's second-quarter data was particularly welcome for German Chancellor Angela Merkel ahead of polls next month as Europe's biggest economy had not seen positive growth since the first quarter of 2008. Analysts had forecast a 0.2 percent drop.