The German economy has been hit at its core, said Michael Huether, head of Germany's IW economicinstitute.
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The Ifo economicinstitute predicts the economy will rebound with a quarterly growth rate of some 7% in July-September.
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However the Ifo economicinstitute in Munich warned against writing off the German economy, saying it was a long way from recession.
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An independent economicinstitute is forecasting the Government will return its books to surplus a year later than forecast by the Treasury.
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The German economy has begun a hesitant recovery but could easily be knocked back into recession, according to the country's leading economicinstitute.