The five leading German economic research institutes have lowered their forecast for growth this year from 1.9 percent to 0.8 percent. “The long upswing of the German economy is coming to an end,” said Oliver repeated möller Leibniz Institute for economic research in Halle. Reason for this is, among other things, that the world economic conditions have deteriorated due to political risks. The risk of a “severe recession” is kept low.
The Institute warned, among other things, before a hard Brexit. A withdrawal of the UK from the EU without the agreement had become since the end of the forecast at the end of March”, although less likely but not excluded”. In the case of a No-Deal-Brexit, the economy is likely to be growth this year and next year are significantly lower than in the forecast presented.
risks, the experts are also in the unresolved trade dispute between the two largest economies in the world, the USA and China. A negative impact on the German economy in addition, bottlenecks in delivery, difficulties in the auto industry and the shortage of skilled workers had.
The increase in Employment is likely to continue, although continued, but at a slower pace than in the previous year. The number of employed persons is expected to rise by 2020 to 45.5 million, which would be approximately 700,000 more than in 2018. At the same time, the researchers predict a decline in the number of unemployed at 2.1 million. In spite of the poorer economic prospects, experts expect the surplus to continue to persist in growing State. In the current year, Plus 41.8 billion in 2020 should be at 35.6 billion euros.
a Better framework for investment required
The Institute criticised the economic policies of the Federal government. “The German economic policy creates risks, for example, by charged increased, the long-term stability of the statutory pension insurance by a significant Performance, which will not be financed from the contributions to”, – stated in the report. “This allows tax increases to be expected that Germany as a location for investment less attractive.” They are therefore calling for the policy to focus on to improve the framework conditions for investment.
For the year 2020, the economic researchers expect a sharp increase in growth. The gross domestic product is expected to increase by 1.8 percent, according to the forecast. Thus, the Institute confirmed its previous forecast for the coming year.
Since the beginning of the year, a number of institutions, has revised the growth forecast for Germany down. Only in mid-March, the five lowered their forecast for 2019 from 1.5 to 0.8 percent. The Organisation for economic co-operation and development (OECD) is currently only 0.7 percent growth for Germany. In the past year, the German economy had grown by 1.4 per cent. In 2017, GDP had risen by 2.2 percent.
The community diagnosis of the five economic institutes, serves the Federal government as a Basis for their own forecasts, which in turn form the basis for the tax estimate. They had reduced their estimate for this year, most recently to 1.0 percent, and thus almost halved. For the coming year, it expects economic growth of 1.6 percent. Is developed in the report by RWI Essen, DIW in Berlin, ifo in Munich, IfW in Kiel and IWH.
the German industry suffers Strongest decline in new orders for more than two years,
Even under a worse order situation. You recorded the strongest decline in new orders in more than two years. In February, the order intake in the manufacturing sector in the month had declined on-year by 4.2 percent, according to the Federal Statistical office. This is the biggest drop since the beginning of 2017.
Thus, the order intake fell for the second month in a row. In January, there had been a fall of 2.1 percent in a monthly comparison, as the statisticians reported, according to revised data. Compared to the same month last year, the decline in February was 8.4 percent.
Decisive for the break-in in February, a sharp decline in the demand for German products from abroad. Order intake from abroad, the Federal office reported a decline of 6.0 percent in the monthly comparison. Domestic orders fell only 1.6 percent.
experts see the main cause of the current economic weakness in China, one of the most important German trading partners. “The orders indicate a clear downturn,” said Thomas Gitzel, chief economist of VP Bank. The duration of the downturn would depend crucially on the economic measures of the government in China.