Economy lower growth forecast significantly

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The economic upswing in Germany to weaken themselves, that is, from the point of view of the “economy”. Also, given the persistently high global risks, the German Council of economic experts weakens its economic forecast.

The five economic experts expect for the current year, a growth of the gross domestic product (GDP) of 1.6 percent. This is evident from the annual report of the Council of experts for the assessment of overall economic development. In the spring, the researchers were still projected a growth rate of 2.3 percent. For 2019, the economy is expected, with an increase of GDP of 1.5 percent. In March they had expected 1.8 percent. With its lowered forecast, experts are even more pessimistic than the Federal government, which says for the two years of 1.8 percent.

“The uncertain future of the global economy and the demographic change in the German economy before the great challenges,” said the Chairman of the Council of experts, Christoph Schmidt. The Federal Republic of standing, therefore, before the “major economic policy decisions”. At the international level, this was especially the “uncertain future of the multilateral global economic order” and on the national level, the ageing of the society.

Many Risks

“The German economy is in one of the longest upswing phases of the post-war period”, – stated in the report. Risks of Customs disputes, a disorderly EU, however the UK’s exit, or a resurgence of the Euro crisis. “Due to the trade conflicts, production problems in the automotive industry, and increasing capacity bottlenecks is to be expected with a weakening of growth,” said economy Isabel way Beak.

Christoph Schmidt (right) at the Handover of the report of the economic experts of Chancellor Merkel

As appropriate measures of the five Economists in the rain, among other things, the increased international tax competition and accept the solidarity surcharge completely abolish it. The solos should be for 90 percent of the payer abolished.

Given the high price dynamics in the German real estate market measures, to extend the offer to be displayed. “Rent control continues only with the symptoms and is not purposeful. Sensible reforms are the cause and reason of acquisition tax as well as a strengthening of the housing benefits. Social housing should be better designed to” recommend to the five Ways.

Warning against protectionism

Because of the aggressive trade policy of US President Donald Trump, the EU should oppose protectionist tendencies. The Economists declared: “The EU should, within the rules of the world trade organization in retaliation, in order to punish rule violations in a credible manner.” The Situation is not, however, compare with a trade war in the 1920s and 1930s.

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March: economic see Boom in danger (21.03.2018)

Given the high Debt levels in EU countries, the experts would be from the point of view of measures to strengthen and improve the enforceability of the fiscal framework in the European Union helpful. The same applies to a further development of the Euro bailout Fund, the ESM, so that an orderly rescheduling of public liabilities.

Higher Retirement Age

Reservations of the Council of experts expressed to the Finance Minister, Olaf Scholz, required long-term stabilisation of the pension levels. You wanted to write the “double line” in the contribution rate and the pension level by 2040, with a constant retirement age, would make the considerably higher level of Federal subsidies needed, and are expected to result in tax increases. Instead, a General increase in the retirement age was necessary.

The Advisory Council on the assessment of the overall economic development was set up in 1963 to advise the policy. Chairman of the Economist Christoph Schmidt is currently. The five members of the Council of experts are appointed, on a proposal from the Federal government for five years. Your annual report recommendations lists. These are for the Federal government, but not binding.

kle/sti (afp, dpa, rtr)