“Despite a categorically improved economic outlook, it is not clear, for now, if the period of stability will continue. This could have this year, negative effects on the labor market “, says a report from the German ministry.

Germany recovered in the second quarter from the most severe recession since the Second World War, with an unexpected economic growth of 0.3%, confirming the effectiveness of government incentive programs.

With the banking system still fragile, analysts warned the optimism caused by the positive GDP could be unwarranted, drawing attention to the low growth rate, of the fragility of the banking system, the plight of the labor market and the decline in consumption.

The use of the programs to reduce the working week moderated the growth in the number of unemployed in Germany, where unemployment rose by only 300,000 people since the financial crisis began in September 2008.

The government estimates that the economy will shrink by 6% this year, but growth in the second quarter could improve the projection.

In the first three months of this year alone, Lithuania’s economy declined by 13.3%. The Baltic states of Estonia, Latvia and Lithuania are affected by a deep recession due to severely declining of property values, tightening credit conditions and reduced exports.

The three states that between 2004 and 2006 had the highest rates of development from EU are currently facing the steepest drop among emerging economies, according to the latest World Bank report.

SEB AB, the largest bank in Lithuania and Swedbank, the largest bank in Estonia and Latvia, is facing huge losses from bad loans. Both banks reported net losses in the second quarter because of that and reduced the volume of new loans.

“Economic decline is very fast, but we expect macroeconomic indicators to improve in the second half of the year,” said agency Bloomberg Vilija Tauraite , economist at SEB Bank. The “hard landing” of the economies of the Baltic states has been anticipated by the rating agencies, the IMF and the World Bank since 2007.

The data on inflation in the EU, in each Member State and reviewed estimations for euro area will be published by Eurostat in mid July.

The average variation of consumer prices was negative in June for the first time since the creation of the euro area in 1999, informs Mediafax.

Food were more expensive a year ago, inflation has fallen since energy and food were more expensive a year ago than today, and the economic crisis gnawed the soundness of pricing policy of companies, analysts say.

On the other hand, lower prices may stimulate demand from consumers, the key factor in boosting economic growth.

IMF announced that the financial situation has improved significantly due to higher demand for loans from Member States, after initially anticipated loss of 292 million dollars for fiscal year 2008-2009, which ended on April 30. In the previous year, the Fund revenues were affected by the decisions of major debtors, such as Argentina and Brazil, to pay its debts before the set date.

For the fiscal year, began on May 1, the IMF predicted a profit of 446 million dollars. The amount could increase, but at 1.1 billion dollars, having regard loans that are still in the stage of negotiations.

“These estimates involve a high degree of uncertainty because of the difficulty to predict the evolution of demand for financing from the IMF and the crisis evolution “, stated in a communication of the international financial institution.

IMF stresses that improving the financial situation does not change the need to implement a sustainable model of getting profit, adopted by the Executive Board last year to reduce Fund dependence by revenue derived from temporary credits.

The change of forecast is a consequence of economic stimulation program of the Government in Beijing, of 585 billion dollars (418 billion U.S. dollars) grant in the form of loans and investments.

China base on government funds, after exports have been reduced drastically due to global crisis.

No incentives tax are needed

“Are not necessary and probably counterproductive” to be granted additional financial incentives this year, recommends BM. In the first quarter of this year, Gross Domestic Product (GDP) grew by 6.1%, the worst performance since 1999. Chinese officials forecast provide economy advance of 8% in 2009, considered to be the limit to maintain the number of jobs.

Council of State attention that China’s economy is in a “critical phase” because the recovery so far is not yet based on solid foundations.
“Economic perspective had improved the situation from three months ago, but must be taken care for 2010 “attention World Bank.

Goldman Sachs forecast indicate for this year an advance of the Chinese economy to 8.3%, while Morgan Stanley anticipate 7%.

“Evolution of the Chinese economy this year will surprise you. Growth is not just an element of stability, but a force that will bring the system of global recession, “said Zoellick at a conference held in Montreal.

Yuan is an important international currency. The official appreciated, however, central bank efforts to make Chinese currency, yuan an important international currency.

It’s good to be created a multi polar of reserves of foreign currencies, but it involves some risks, “said Zoellick. WB anticipates a decline of 1.7% of the global economy this year, the first decline after the Second World War.

International financial institution estimated that the pace of growth will become positive in 2010, after strengthening the financial sector. For 2010, the bank expects growth of 2.3%.

“If we look in perspective, over 12 months, we are extremely optimistic regarding the situation of emerging markets”; said Stephen Jennings, the executive director of Renaissance Group.

West will be buried in debt and government regulations, while countries with emerging markets will be freer to accelerate the development process intended to reduce the difference separating the developed world, he has added. “At this point the West will review its position towards economic liberalism, while emerging markets are going in exactly opposite direction“, said chief of Renaissance.

Banks and financial institutions in the emerging states possible will have advantage of the situation, because large developing countries (Member BRICE) have understood that leaving the West, to take care of their excess capital has not been too inspired decision.

Difficult situation in which is Hungary’s economy, affected by a severe recession, made that the number of companies from the position of liquidation to achieve the highest level in the history of the country, in May, quoted by a local publication Hungarian.

The annual rate of firms in liquidation increased by 51 percent last month, the number of companies affected reaching 1. 330 units, that is, on average, in Hungary entered in bankruptcy about 45 companies each day.

Also, in May in Hungary were created 3296 new companies. The number of firms that are in liquidation, during the period January to May increased by 29%, compared to the same period of 2008.

“Hungary had to accept a loan from the International Monetary Fund, while it should have been helped by Europe. It’s a big problem for the European institutions”, the analyst noted.

At the same time, he insisted that it is abnormal, that bank errors to be supported by taxpayers, the more so as America, for example, there are too many banks.

Two thirds of the population of the 23 largest economies of the world believes that the massive government spending developed to combat financial crisis have lack of clear direction.

The study, conducted by market research and survey public Ipsos in 23 countries representing 75% of the world economy, also revealed 60% of the citizens of these states provide a slowdown of economic growth, because of legislation designed to strengthen governments in crisis.

Gross Domestic Product (GDP) of the first three months of this year increased with 0.4% compared with the previous quarter, in seasonally adjusted terms, announced the National Statistical Office of Poland.

Compared to the first quarter of 2008, the economy has advanced with 0.8%, a lower level than anticipated by analysts, 1%.

“Poland has achieved the best results in Europe”; said Piotr Kalisz, an analyst at Citibank.

However, a number more lower of analysts expects GDP to increase over this year, being more probably a slack of economy. They justify the evolution of GDP in the first quarter by reduce dependence of Poland exports.