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Ifo's Sinn sees Germany on the brink of recession

Published 10/11/2014, 17:29
Updated 10/11/2014, 17:50
© Reuters German Finance Minister Schaeuble addresses a news conference at the finance ministry in Berlin

BERLIN (Reuters) - Germany is teetering on the brink of a recession due to weakness in major emerging trading partners, the head of the influential Ifo economic research institute said on Monday, four days before the release of third quarter gross domestic product data.

"It is going to be really close," Hans-Werner Sinn told Reuters in an interview, saying that surveys by the Ifo institute pointed more towards a recession.

"We have an economic crisis in the so-called BRIC countries, Russia anyway, but also Brazil, and now China is weakening slightly as well," Sinn said when asked on the reasons for the bleak prospects.

The United States economy is the only bright spot on the horizon, but this will not suffice to galvanise the global economy, Sinn added.

The German economy had a strong start to 2014 but contracted in the second quarter and fears are now rife of another fall in the third - amounting to a technical recession.

In a Reuters poll, economists expect only meagre quarterly growth of 0.1 percent in the third quarter, following a 0.2 percent contraction in April-June. Forecasts ranged from contraction of 0.2 percent to growth of 0.3 percent.

© Reuters. German Finance Minister Schaeuble addresses a news conference at the finance ministry in Berlin

The German government has cut its growth forecasts for this year and next to 1.2 percent and 1.3 percent respectively, blaming modest global growth and international crises.

(Reporting by Michael Nienaber and Oliver Denzer; Editing by Angus MacSwan)

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