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IW-Forschungsgruppe Konjunktur IW-Trends No. 3 25. September 2014 The German Economy in Stop-and-go Mode

The IW Economic Forecast Autumn 2014

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The German Economy in Stop-and-go Mode
IW-Forschungsgruppe Konjunktur IW-Trends No. 3 25. September 2014

The German Economy in Stop-and-go Mode

IW-Trends

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German Economic Institute (IW) German Economic Institute (IW)

The IW Economic Forecast Autumn 2014

The recovery of the German economy slowed significantly in the second quarter of 2014. With growth expected to be weak in the second half of 2014 all signs point to the current economic and political environment being incapable of sustaining any continuous broad upswing. Particular caution is being exercised in the making of investments. This is due, on the one hand, to the slower pace of the world economy, particularly with the recovery of European business activity still not up to speed and under further strain in the wake of the conflict between Russia and Ukraine. On the other hand, investment activity is also suffering from growth-inhibiting economic policies in Germany. The German economy is correspondingly set to grow by barely 1 ½ per cent in 2014. Even assuming a continuous increase in real GDP throughout 2015, economic performance is only expected to surpass the preceding year's level by just over 1 ½ per cent. Growth in both 2014 and 2015 will be fed exclusively by consumption and domestic investment, with the contribution of foreign trade being almost neutral. Despite only moderate growth, new jobs will continue to be created. This will bring scant relief to unemployment, however, with an annual average of almost 2.9 million jobless in 2015. The state budget will finish both years with a net sur-plus. At the same time, growing expenditures will mean a further slight increase in public spending as a proportion of GDP.

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The German Economy in Stop-and-go Mode
IW-Forschungsgruppe Konjunktur IW-Trends No. 3 25. September 2014

IW-Forschungsgruppe Konjunktur: Die deutsche Wirtschaft im Stop-and-go-Modus – IW-Konjunkturprognose Herbst 2014

IW-Trends

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German Economic Institute (IW) German Economic Institute (IW)

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