BERLIN (Reuters) - The German government will decide late next month whether to adopt further measures to stimulate the economy, Economy Minister Michael Glos said after a meeting of government officials and business leaders on Sunday.
Chancellor Angela Merkel has faced pressure from EU peers to do more to promote growth and raised hopes on Thursday when she said Germany knew it had a responsibility as an economic power and would consider new stimulus steps over time.
“We have agreed ... that we will decide at the end of January what there is to do in addition,” Glos said after Sunday’s meeting, which was hosted by Merkel and included trade unions and business leaders as well as government officials.
A package of measures the government says is worth about 31 billion euros ($41.13 billion) is due to come into effect in January.
But Germany and the euro zone, which fell into recession this summer, face a deteriorating economic outlook.
The Munich-based Ifo thinktank on Thursday forecast that German gross domestic product (GDP) would shrink by 2.2 percent in 2009 due to weak foreign demand. The forecast marked a sharp revision from Ifo’s June projection for growth of 1.0 percent.
Such a contraction would represent Germany’s weakest annual economic performance since the Federal Republic was founded in 1949 out of the rubble of World War Two.
Finance Minister Peer Steinbrueck said after the meeting that investment programs and consumption incentives were among the possible means of stimulating growth that were discussed.
The participants also talked about tight credit conditions, but no decisions were taken, Steinbrueck added.
Germany was the world’s largest exporter of goods last year, profiting from strong growth in its export markets, many of which have now gone into reverse.
The government can do little to boost foreign demand, but it has faced calls from business groups and leading economists to do more to stimulate the domestic economy.
Writing by Paul Carrel; editing by Elizabeth Piper