Economic Data Suggests Germany Is Sliding Toward A Recession

August 11, 2008 12:59 p.m. EST

Berlin, Germany (AHN) - Second quarter data for Germany point to chances that Europe's largest economy is sliding toward a recession.

Factory orders slipped by 2.9 percent in June from the previous month and slumped by 5.1 percent for orders overseas. As a result, production at German factories grew by an anemic 0.2 percent in June.

The Economics Ministry, in a statement, said, "Demand from abroad is slowing more sharply than domestic demand, which is also on a downward trajectory... As a result prospects for industrial production all in all have worsened."

However, it is not only in Germany where the economic slump is felt, but across the euro zone, where Deutsche output accounts for one-third of total production.

Jonathan Loynes, chief European economist for Capital Economics, confirmed in a report that "the euro zone will be the first major economy to fall into recession."

Germany's June export went down 2.9 percent from the previous month and 8.4 percent compared to a year ago.