BoI warning as economic recovery in Germany hits 'bumpy patch'
ECONOMIC difficulties in Germany should be of equal concern as the problems in Greece, economists at Bank of Ireland say in their latest outlook on the global economy.
"There are worrying signs that the German recovery is hitting a rough patch," the report says. "Growth in the final quarter of 2009 was flat, with private consumption falling 1pc, government spending down 0.6pc, and investment dropping 0.7pc," it says.
The saving grace was exports, which gained 3.0pc, but there are signs this quarter is not going to be much better, it says.
"This has wider implications for growth in the euro area as a whole. The data does not suggest that the economy is going to slip back into recession but the recovery is probably hitting a bumpy patch in the road.
"The euro's decline against the dollar continues as the US economy delivers a robust recovery."
Dan McLaughlin, the bank's chief economist said the US economy picked up momentum in the latter part of 2009.
"The most recent data implies a strong start to 2010, with the result that the consensus GDP forecast for the year as a whole has moved higher and now stands at 3pc.
"In contrast, the euro economy lost momentum in the final months of last year.
"The most recent data on the UK economy has also tended to surprise to the downside, although again the January figures were, no doubt, hit by the weather," he said.