Europe’s largest economy is growing for the ninth year in a row. Trade conflicts and problems of the car industry will leave in 2018, however, scarring.
After two boom years, the German economy has shifted into a lower gear. The gross domestic product (GDP) grew last year by 1.5 percent, respectively, compared to 2.2 percent in the previous two years, as the Federal Statistical office in Berlin on Tuesday told on the basis of provisional data.
“The growth dynamics of 2018 has disappointed. This should be a warning sign for this year,” said the managing Director of the German chamber of industry and Commerce day (DIHK), Martin Wansleben. It is all the more important to make the “homework” with a view to the domestic location. Wansleben called for tax relief for companies, in order not to fall in the international competition. “In addition, the companies are in need of removal of a significant bureaucracy and a modern infrastructure. The companies can only invest so successful in the necessary digitalisation.”
The German economy is nearly rammed to some experts feared the recession is over. The GDP growth is likely to have between October and December 2018, informed the Federal Statistical office. There had been not a Minus, but rather a “small Plus”. In the summer, the economy had shrunk 0.2 per cent. Experts talk of a technical recession if the GDP decreases for two quarters in a row. This was last seen in the year 2012/13.
The ninth year of Growth in a row
2018 the ninth year of Growth in a row since 2010. At the time Europe’s largest economy from the deep recession of 2009 had to recover as a result of the global financial crisis.
The economy was propped in the past year, the Federal office, once again, of the purchase desire of the consumer. Added to this were increased investment of many companies in equipment, buildings and other facilities, and the construction boom. Also, the consumption expenditure of General government, including social benefits and salaries of employees, according to the figures.
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No need to worry – an Interview with Stefan Kooths from the Kiel Institute for the world economy in Kiel
Less is more, imports, exports,
The Export was as a driver of growth. According to preliminary calculations, the imports increased more than exports of Goods and services. The US-fueled trade conflicts are a burden on the export business. Add to that the problem of Germany, so important to the car industry with the introduction of the new emission and fuel – consumption standards WLTP. The manufacturers had to cut so at times your production. This had a negative impact on the economic development in the third quarter.
According to calculations by the Kiel Institute for the world economy (IfW) also held back the low water in the Rhine to the growth. “Overall, the low water, the growth rate of the gross domestic product in the third quarter of 2018, by 0.2 percentage points is likely to have dampened in the fourth quarter to 0.1 percentage points,” said IfW-economic chief Stefan Kooths.
Positive effects for the Treasury
For a number of years of positive economic activity and the persistently low interest rates, the Treasury will continue to benefit. The German government could take, according to the calculations of statisticians in 2018 for the fifth Time in a row, more money than spend. The Surplus of the Federal government, länder, municipalities and social security funds accounted for below-the-line 1.7 per cent of GDP to 1.0 percent in the previous year. A minimal deficit was recorded in Germany last 2013.
Economic research institutes and Bank Economists have recently lowered their economic forecasts for Germany. You assume, however, that the upturn in this year. The Federal Ministry of economy, expressed his confidence: “For a positive development of private consumption in the coming months, the additional increase in disposable income, received of the year by the reductions in taxes and levies extra boost.” Private consumption makes up a good half of the entire economic performance.
ul/hb (AP, rtr)