German GDP drops by 3.8%, largest decline in 40 years

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Saturday, May 16, 2009

According to official figures, Germany's economy contracted by 3.8% in the first quarter of this year, the worst decline in four decades. This is the fourth consecutive time the quarterly GDP has fallen. The plunge was larger than the 3.2% decline predicted by economists.

The Federal Statistics Office reports that the decline was lead by a large slide in exports and investments.

"This is a dramatic plunge and a worse start to the year than we could have imagined," said Juergen Michels, an economist for Citigroup in London.

Other European countries also reported declines in their GDPs. Italy reported a 2.4% decline in GDP in the first three months of 2009, the fastest plunge since 1980, while France reported a 1.2% fall in output.

The eurozone, consisting of sixteen countries, saw its economy contract by 2.5% last quarter, the worst slump since 1995.