(AFP) – Jul 10, 2012
JAKARTA — German Chancellor Angela Merkel said Tuesday that growth in Europe's largest economy would be more sluggish this year due to weaker exports to European markets but that it would still manage to expand.
"This year we will continue to grow, though it will be somewhat weaker. We realise our exports to European markets are less strong than they used to be," she told reporters in Jakarta.
"We're still fighting the consequences of 2008 and 2009, but we've learned our lesson," she said after talks with Indonesian President Susilo Bambang Yudhoyono.
"Germany suffered an economic slump of five percent in 2009 as a consequence of the Lehman Brothers crisis. That was the most severe slump we have experienced in the 60-year-long history of the present Federal Republic of Germany," she said.
"We have not yet left the 2008-2009 crisis behind us," she said.
The International Monetary Fund said last week that conditions were in place for the German economy to recover this year -- and lead the eurozone back to growth -- unless the eurozone crisis intensified further.
For 2012 as a whole, the fund said it projected GDP to grow by 1.0 percent, down from 3.1 percent in 2011. Growth would then pick up to 1.4 percent in 2013, it predicted, while warning of a number of near-term downside risks.
As Europe's biggest economy, Germany could play a "pivotal role in addressing the challenges posed by the crisis" and "reinforce reform momentum in the euro area", the IMF suggested.
Merkel said that Indonesia, which had slashed its sovereign debt from 80 percent of GDP to 24 percent in a matter of years, could provide a model for Europe.
"I think that's an example of what can be achieved and what Europe has to achieve, especially given the fact that Indonesia was able to achieve this over a short time, in fact in a few years," she said.
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