Germany Lowers Growth Estimate to 0.7%; Swiss Sentiment Improves

Arthi Gupta
18 Jan, 2012
New York City

Construction production in the euro area recovered and Italian trade deficit narrowed in November. Germany lowered its 2012 growth outlook and Swiss sentiment improved to a seven-month high in January.

[R]2:30 PM Frankfurt – Construction production in the euro area recovered and Italian trade deficit narrowed in November. Germany lowered its 2012 growth outlook and Swiss sentiment improved to a seven-month high in January.[/R]

Euro-zone Construction Recovers

Construction production in the euro area increased 0.2% on an annual basis in November, from the 2.5% fall in October, data released by statistics office Eurostat showed today. In EU27, construction output rose 0.7% annually in November, following the 1.4% drop in October.

From a month ago, construction output climbed 0.8% in November, after falling 1.4% in October.

Germany Lowers 2012 Outlook

The German government on Wednesday lowered its 2012 growth outlook on lower demand from euro area nations due to the sovereign debt crisis.

The German economy is expected to expand 0.7% this year, down from the prior estimate of 1%, the Berlin-based Economy Ministry said in its annual economic report.

Export growth is projected to ease to 2% from 8.2% in 2011 and the annual growth in imports is estimated to fall to 3% from 7.2% last year.

The ministry said the jobless rate will decline to 6.8% in 2012, from 7.1% in 2011.

Italian Deficit Narrows

Italy''s current account deficit declined to €3.45 billion in November from €5.15 billion a year earlier, data released by the central bank showed.

The deficit in the goods trade account decreased to €1.12 billion in November from €2.77 billion last year, while the deficit in the services account contracted to €815 million from €1.42 billion.

Separately, Italy''s trade gap narrowed to €1.6 billion in November from €3.4 billion during the same month of the previous year, the statistics office Istat said.

Exports rose 6.5% from a year ago in November, while imports grew 0.5%.

Swiss Sentiment Improves

Switzerland''s economic sentiment improved in January, data showed on today.

The ZEW-CS-Indicator rose by 21.9 points to -50.1 points in January, marking the highest level of the indicator since June 2011, from a reading of minus 72.0 in December.

The indicator for the assessment of the current economic situation increased 5.3 points to the minus 14.7 threshold.