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ECONOMY

Germany slashes 2009 growth forecast

The German government on Thursday slashed its growth forecast for 2009 – the world’s third largest economy is now only expected to expand by a meagre 0.2 percent next year.

Germany slashes 2009 growth forecast
Photo: DPA

Economy Minister Michael Glos announced at a press conference in Berlin that the government still expected gross domestic product (GDP) to grow by 1.7 percent this year, however, the outlook for next year was grim.

“We already see the economy’s first skid marks,” Glos said. “There’s nothing to sugarcoat or keep quiet.”

Before the crisis currently rocking world financial markets Berlin had been expecting growth of 1.7 percent next year. The German economy grew by 2.5 percent in 2007.

The revised growth forecast brings the government’s expectations in line with the country’s leading economic institutes, which on Tuesday warned Germany was teetering “on the brink of recession” in their annual autumn outlook.

The institutes cited the global financial crisis, collapsing real estate bubble and inflationary pressures as the biggest dangers to the German economy – which is heavily dependent on exports.

“The risk that aforementioned conditions could worsen has increased in recent weeks,” the institutes wrote in their highly anticipated economic report.

MONEY

Italy expands €200 payment scheme and introduces public transport bonus

Italy's government will extend its proposed one-time €200 benefit to more people and introduce a €60 public transport payment, Italian media reported on Thursday.

Italy expands €200 payment scheme and introduces public transport bonus

Seasonal workers, domestic and cleaning staff, the self-employed, the unemployed and those on Italy’s ‘citizens’ income’ will be added to the categories of people in Italy eligible for a one-off €200 payment, ministers reportedly announced on Thursday evening.

The one-time bonus, announced earlier this week as part of a package of financial measures designed to offset the rising cost of living, was initially set to be for pensioners and workers on an income of less than €35,000 only.

However the government has now agreed to extend the payment to the additional groups following pressure from Italy’s labour, families, and regional affairs ministers and representatives of the Five Star Movement, according to news agency Ansa.

Pensioners and employees will reportedly receive the €200 benefit between June and July via a direct payment into their pension slip or pay packet.

For other groups, a special fund will be created at the Labour Ministry and the procedures for claiming and distributing payments detailed in an incoming decree, according to the Corriere della Sera news daily.

One new measure introduced at the cabinet meeting on Thursday is the introduction of a one-time €60 public transport bonus for students and workers earning below €35,000. The bonus is reportedly designed to encourage greater use of public transport and will take the form of an e-voucher that can be used when purchasing a bus, train or metro season pass.

Other provisions reportedly proposed in the energy and investment decree (decreto energia e investimenti), which is still being adjusted and amended, include extending energy bill discounts, cutting petrol excise duty and rolling on the deadline to claim Italy’s popular ‘superbonus 110’.

The €14 billion aid package, intended to lessen the economic impact of the war in Ukraine, will “fight the higher cost of living” and is “a temporary situation”, Prime Minister Mario Draghi has said.

The Local will report further details of the payment scheme once they become available following final approval of the decree.

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