FRANKFURT, March 18 A disappointing start to the
year for the German economy will not derail recovery of Europe's
largest economy, the Bundesbank said in a monthly report on
German industrial output showed zero growth in January while
industry orders unexpectedly fell, deepening concerns about the
strength of the rebound from a weak fourth quarter, which saw
gross domestic product (GDP) contract by 0.6 percent
But the German central bank said in its March report that
the economy was still on track to recover, pointing to improved
expectations for exports and production.
"The German economy's start to the year missed expectations
that had been driven by a calmer situation on financial markets
and improved sentiment among companies," the Bundesbank said.
"The hesitant start to the year 2013 does not put into
question the prospect of a pick-up of economic activity."
Bundesbank officials last week stuck by a forecast for 0.4
percent growth this year, having said previously the economy was
likely to stagnate in the first quarter.
Most economists still see the country escaping a recession,
defined as two consecutive quarters of contraction, by growing
weakly in the first quarter before regaining momentum.
Recent forward-looking sentiment indicators have shown
German companies, investors and consumers becoming more
optimistic, while unemployment dropped in February.
The Mannheim-based ZEW think tank's monthly poll of investor
sentiment on the current state of the German economy and the
business climate index of the Munich-based Ifo think tank are
both expected to rise in March.
They are due on Tuesday and Friday respectively.
The Bundesbank also said that the appreciation of the euro
against major currency at the end of last year was among other
reasons responsible for a fall in import prices in January.