Tags: Dynapartners | US | Recession

Dynapartners CEO: US is Three Months Away From Next Recession

Wednesday, 17 Aug 2011 08:28 AM

The next recession could strike in just three months, says Beat Wittmann, CEO of Dynapartners.

Markets have already priced in assumptions that the economy will be weaker than expected this year, but sluggish German economic growth figures could mean that a soft patch will end up morphing into a recession.

The German economy grew 0.1 percent in the second quarter, well below market expectations of 0.5 percent and first-quarter growth of 1.3 percent.

"What we see is a soft patch and double dip recession risk three months down the line," Wittmann tells CNBC.

"The markets are discounting this soft patch, but it could get worse,"

Wittmann says, adding "it depends on political decisions and whether companies are investing into expansion and whether consumers are spending."

Analysts were disappointed with the growth figures out of Germany.

"Let's face it, 2Q marks a turning point in the German business cycle," says Unicredit chief German economist Andreas Rees, according to the Associated Press.

"The period of exuberant growth is now behind us. Less dynamic momentum will be in the pipeline in coming quarters, given the slowdown of the global economy."

Slower growth in Germany does not bode well for the rest of Europe, where a debt crisis continues to keep frayed nerves further on edge.

"It now looks like growth is slowing in core countries too," says Christoph Weil, an economist at Commerzbank, according to the New York Times.

"This could intensify the sovereign debt crisis in so far as the readiness and ability of countries with high credit ratings to help crisis-stricken countries will drop as a result. This could trigger a downward spiral in economic growth."

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The next recession could strike in just three months, says Beat Wittmann, CEO of Dynapartners. Markets have already priced in assumptions that the economy will be weaker than expected this year, but sluggish German economic growth figures could mean that a soft patch will...
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2011-28-17
Wednesday, 17 Aug 2011 08:28 AM
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