Paris, France: November 13, 2008, IR Summary/NYT -  The whole world is under recession. Industrialized countries are facing its heat, they are facing a major slowdown. Germany has also entered the recessing gate.

As per O.E.C.D. the gross domestic product for its 30 member countries would decline 0.3 percent in 2009 from 2008, before recovering slightly to grow by 1.5 percent in 2010.

Jorgen Elmeskov, an economist at the organization, said that the outlook depended largely on the depth and duration of the financial crisis.
“The ongoing adjustment in housing markets still has a long way to go,” he said in a statement.

The organization’s report came as the German Federal Statistical Office said Thursday that G.D.P. fell 0.5 percent in the third quarter after a 0.4 percent decline in the second quarter. The commonly accepted definition of recession is two quarters of contraction in G.D.P. The office said that exports, a pillar of German growth, had declined. From a year earlier, Germany’s real G.D.P. climbed 1.3 percent in the third quarter. “Real” data are adjusted for price changes.

“This is the second recession in six years and shatters earlier hopes that Germany might hold up relatively well against the global downturn,” Jennifer McKeown, an economist in London with Capital Economics wrote in a research note.

While Germany is the first of the major economies where a technical recession has been confirmed, she said, data Friday will probably show France and Italy are also in recession. She predicted the German economy would contract next year by 0.5 percent.

The Bank of England also warned that the British economy would shrink significantly next year and that inflation would cool off, stoking expectations that the central bank would lower interest rates further.

The slowdown in Germany had become increasingly obvious as the credit crisis reached a new and particularly destructive phase. Just Wednesday, the IG Metall union, which had been seeking a raise of 7 percent to 8 percent, reached a scaled-down deal with German employers for an increase of 4.2 percent spread over 18 months.

The O.E.C.D. also predicted that the average unemployment rate in its member countries, estimated at 5.9 percent this year, would climb to 6.9 percent next year and reach 7.2 percent in 2010. It said inflation would continue to ease along with the decline in economic activity, and that additional government economic stimulus measures were needed. Full