Economists cautious on global outlook

German Chancellor Angela Merkel waits on a TV set of ahead of an interview in Berlin -- August 13, 2009

TEXT OF STORY

Kai Ryssdal: Staying on other side of the Atlantic for a bit, there was some good news from Europe today. Both France and Germany reported that their economies grew last quarter. A three-tenths percent increase in gross domestic product isn't much to celebrate. But Marketplace's Steve Henn tells us people looking for signs the global recession is ending will take what they can get.


STEVE HENN: The news from France and Germany is good, but many economists remain cautious about the continent's economic outlook. Italy, Spain and the U.K. are still mired in recession. And the downturn in Europe has been deep.

EDWARD HADDAS: France and Germany and most of the Euro zone have had a dreadful few quarters -- very, very sharp declines in economic activity.

Edward Haddas is an economist at BreakingViews, a Web site based in London. He was shocked today when France and Germany reported economic growth. But...

HADDAS: That doesn't necessarily mean that we are in the path for a full recovery. I think bouncing along the bottom is a more likely scenario.

Haddas thinks this growth may be the result of government stimuli. Germany's Chancellor Angela Merkel faces elections in September, and pressures to keep voters happy. After the elections, Haddas fears the stimulus could be scaled back and the country's economy could begin start shrinking again.

But Michael Moore, an economist at George Washington University, thinks there is good reason to be hopeful.

MICHAEL MOORE: Germany's not alone. There is growth in China. There is some indication in the United States that things are not as bad as they have been in recent periods.

And Germany is the world largest exporter. So Moore believes it's already benefiting from the beginnings of a global recovery.

MOORE: The growth that we've seen in this quarter is a reflection of increased export demand. And that means the world as a whole is buying German goods.

Last quarter, German exports shot up 7 percent.

In Washington, I'm Steve Henn for Marketplace.

About the author

Steve Henn was Marketplace’s technology and innovation reporter for the entire portfolio of Marketplace programs until December 2011.

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