German economic recovery stumbles

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Germany, one of Europe’s strongest economies, appears to have suffered a setback on its road to economic recovery.

Statistics have revealed that Gross Domestic Product (GDP) in Germany fell by around a quarter of a per cent in the fourth quarter.

This has sparked fears that Germany could soon enter a recession, which is defined as two quarters of negative activity. Given that Germany is the eurozone’s largest economy, other countries will be keeping a close eye on the German economy’s progress.

Germany had so far bucked the worldwide trend and performed well compared to the US and the rest of Europe.

The country still managed to produce 3% growth over the course of 2011, double that of the US and the rest of the eurozone.

This was only a small decline from the 3.7% the country experienced the previous year. The growth in 2010 was actually the fastest since Germany’s reunification in 1990.

This was driven largely by investment and consumer spending, as well as falling levels of unemployment. Figures show that investment in the country increased by 8.3% compared to 2010, and consumer spending went up by 1.5% - the fastest for five years.

But those strong performances look set to be a thing of the past as experts and economists predict a tough year ahead for Germany.

Economists are expecting to see a huge decline in growth this year, with some even predicting stagnation. The Bundesbank, Germany’s national bank, is forecasting growth to slow to down to as little as 0.6%.

Transferring money to Germany

If you are looking to invest in Germany, think carefully about how you will be transferring money to Germany. Foreign currency exchange rates quoted by banks are almost always worse than the exchange rates available through specialist currency dealers.

So if you are looking to send money to Germany – which you will inevitably have to do if you are looking to make a property investment - be sure to compare the market before you buy your overseas currency.

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