The German economy is on track for growth this year of around 1 per cent despite a slump in the manufacturing sector, Bundesbank Vice President Juergen Stark said today.
He said said the Bundesbank maintains a medium-term perspective and was not concerned the recent negative monthly figures. "They go up and they go down," he said.
The Ifo business sentiment index in April also fell for the third month in a row. The two surveys combined have some analysts worried that Germany may slip into a mini recession.
The economy contracted in the latter half of last year. It is expected to rebound in the January-March period with gross domestic product expanding around 0.5 per cent, partly due to adjustments for the number of days worked. But that could prove the high point for 2005.
The first quarter GDP estimate is due out on Thursday. And strong industrial orders for March released on Friday raised hopes that the German economy may be in better shape than thought.
Orders rose by a seasonally adjusted 2.2 per cent month on month, powered by demand for capital goods. Orders had fallen 2 percent in February.