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There are new hopes that Germany could be one of the first of the big economies to emerge from the global recession by unexpectedly recording a growth in the second quarter of 2009. This was helped in part by declining consumer prices and improved demand in industry orders.
Industrial orders saw a better than expected 3.5% rise in July, which extends on a 3.8% increase in June. A key factor in this rise was an internal army contract of 400 armoured vehicles worth 3.1 billion Euros. However, Germany’s exports continue to improve with a with 12% increase in trade surplus to 13.9bn Euros, compared to 12.4bn in June.
Germany’s export-led economic model has been heavily criticised as the global downturn worsened, but increasing activity in Asia, particularly China and India, continues to help recover growth through 2009. Exports grew by a seasonally adjusted 2.3% to 70.5bn Euros in July with 12% of all German exports being shipped to emerging Asia.
Although German economic activity contracted by 3.5% in the first quarter of 2009, it expanded by 0.3% in the second quarter and is expected to grow further in the second half of the year. If demand grows with the economy order books in the manufacturing sector could reach levels that were last seen at the beginning of 2006.
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