German GDP is predicted to fall by about 4.5 % in the year 2009 and increase by 0.5% at the most in 2010, according to the spring forecast by the institute for the German economy (IW) in Cologne. More than 1,900 businesses from the whole of Germany took part in this IW survey.
It turned out that in the west of Germany two thirds of businesses expect output to decrease in 2009 and just 10% think that it will increase. In the east of Germany the respective figures are 53% and 14% respectively. This sceptical picture is marked to a large extent by a slack in the foreign trade business. Just 7 % of German businesses expect exports to grow in 2009 as compared to 56% which believe that German exports will decrease as compared to the year 2008.
According to the IW forecast, German exports will drop by 17% (figure adjusted for price) this year.
58 % of companies in the west and 54 % in the east of Germany are convinced that they will reduce investment in 2009. Just 11% of businesses in the west and 16% in the east expect the economic situation to improve. In view of these grim prospects 56% of all businesses interviewed plan to cut jobs this year and just 8% to take on new personnel. 