Das Bruttoinlandsprodukt misst, wie viele Waren und Dienstleistungen in einem Jahr produziert wurden.
Up until the economic and financial crisis, economic conditions in the European regions had been converging. This process has come to a complete standstill in recent years due to lower growth in Eastern Europe and stagnation in Southern Europe.
Before the economic crisis, European regions with low economic output per inhabitant grew faster than the wealthier ones. The living conditions on the continent became more similar. Since 2010, however, the process of catching-up has been stopped.
The global economic climate has deteriorated. The protectionist tone of the US administration is provoking a world-wide trade conflict which may well trigger other problems, such as financial crises in China or in Europe.
The current robustness of the German economy has triggered a debate about the risk of overheating. High utilisation of aggregate production capacity does not necessarily mean an economy is overheating.
Over the last few years the African continent has received considerably more international attention – most recently at the G20 meeting in Hamburg – and with it has come increasing discussion of the continent’s economic opportunities and its integration into international value chains.
The German economy remains on an expansion course, with real gross domestic product expected to grow by over 1 ½ percent in 2017 and by 1 ¾ percent in 2018, the lower number of working days acting as a brake on macroeconomic performance in the current year.
Whatever the French may choose to be their new head of state at the beginning of May, he or she is faced with major economic challenges. Especially in the areas of labor market and public finances further reforms are bitterly necessary.
The United Kingdom intends to leave the single market, yet still wants to retain broad access to it by means of a comprehensive free trade agreement. But the question remains as to whether the European Union is prepared to play ball. Brexiteers claim that German companies in particular, worried about their exports to the UK, will push for a gentle compromise in the favour of the UK, so that trade can continue with as little disruption as possible. Yet a survey by the Cologne Institute for Economic Research (IW Köln) has cast doubt on this view.
2016 has seen an ongoing and dramatic increase in economic and political uncertainty. Besides the growth problems of the larger emerging economies and the as yet unsolved debt and structural problems in Europe, the anticipated exit of the United Kingdom from the EU and the election results in the USA have reduced companies’ long-term planning horizon even further.
IW Economic Forecast Spring 2016
Head of the Research Group Macroeconomic Analysis and Forecast
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