BERLIN, Oct 6, 2009 (AFP) - The German economy, Europe's largest, will shrink less than feared this year, a government spokesman said on Tuesday, forecasting output of minus four to five percent from minus six percent before.
Despite the more bullish outlook, even a contraction of minus four percent would be by far the deepest recession in Germany since World War II.
The spokesman referred to a recent video message by Chancellor Angela Merkel in which she said: "This year, we will have growth of around four to five percent."
The most recent official forecast predicted that output would contract by an eye-watering six percent this year, as the global economic crisis slammed demand for goods made in Germany, the world's second largest exporter.
However, recent forward-looking indicators, such as business confidence data, have pointed to brighter times ahead for Europe's economic powerhouse as exports begin to recover.
The next official forecast is set to be unveiled on October 21.