Germany’s Economic Recovery Going Well

Agence France-Presse reports that the German economy will grow by 2.6% in 2011, Economy Minister Rainer Bruederle said, increasing a previous forecast of 2.3% made in January. The growth rate will slow next year, coming in at 1.8%, Bruederle added, leaving Berlin’s earlier forecast for 2012 unchanged.

Germany, the world’s second largest exporter after China, suffered a crippling recession in 2009, with its economy contracting by nearly 5%. But Europe’s biggest economy has since staged a storming comeback and last year registered its strongest performance since the country was reunified in 1990.

The country’s average unemployment is projected to be 2.9 million in 2011 and 2.7 million in 2012. The new growth projections put Germany on a much faster growth path than its European neighbors. France is poised to grow by 2%, whereas Britain expects 1.7% growth.

The European Central Bank recently raised interest rates for the first time since mid-2008 in a bid to contain inflation, although ECB president Jean-Claude Trichet said it was not the start of a series of hikes. The government says it that prices would rise on average by 2.4% in 2011 and by 1.9% in 2012. ◆