Reply #7: Germany's economy treading water [View All]

[EuroObserver]

(BBC) The German economy stagnated in the final quarter of 2005, casting doubt on the durability of its nascent economic recovery.

Economic output was flat in the three months to 31 December, official data showed, after positive growth in each of the previous three quarters. On an annualised basis, output was 1% higher than in 2004's final quarter.
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Analysts are divided over whether talk of sustained economic recovery last year may have been premature. "Just a few weeks ago, the sky seemed to be the limit in Germany," said Andreas Rees, from HVB Group. "However, in fact, the figure is far less upbeat."

But Rainer Guntermann, from Dresdner Kleinwort Wasserstein, said he still expected the economy to grow between 1.5% and 2% this year. "The interpretation will be that the economy has taken a breather," he said. "It would be wrong to talk about an end to the recovery. The second half of 2005 was better than the first."

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