Xinhua, Berlin :
Germany’s five leading economic research institutes have jointly slashed their economic forecasts “significantly downwards” for the country.
The German Institute for Economic Research (DIW), the ifo Institute for Economic Research, the Kiel Institute for the World Economy (IfW), the Halle Institute for Economic Research (IWH) and the Essen Institute for Economic Research (RWI) now expect Germany’s gross domestic product (GDP) to increase by 0.5 percent only in 2019. Back in spring, the German institutes had still assumed an increase of 0.8 percent.
According to the joint forecast, the reasons for the poor performance of Germany’s economy include the declining global demand for capital goods, political uncertainty and structural changes in the automotive industry.
“German industry is in a recession,” said Claus Michelsen, head of the Forecasting and Economic Policy Department at the DIW.
The “high degree” of political uncertainties worldwide dampens companies’ investments, which has an impact on Germany’s foreign trade, the economic experts noted.
“Risks arising from an escalation of the trade war are particularly high. But a disorderly Brexit would also have costs,” Michelsen said. In case of a hard Brexit, Germany’s GDP would be 0.4 percent lower next year than with an orderly deal.
Germany’s five leading economic research institutes have jointly slashed their economic forecasts “significantly downwards” for the country.
The German Institute for Economic Research (DIW), the ifo Institute for Economic Research, the Kiel Institute for the World Economy (IfW), the Halle Institute for Economic Research (IWH) and the Essen Institute for Economic Research (RWI) now expect Germany’s gross domestic product (GDP) to increase by 0.5 percent only in 2019. Back in spring, the German institutes had still assumed an increase of 0.8 percent.
According to the joint forecast, the reasons for the poor performance of Germany’s economy include the declining global demand for capital goods, political uncertainty and structural changes in the automotive industry.
“German industry is in a recession,” said Claus Michelsen, head of the Forecasting and Economic Policy Department at the DIW.
The “high degree” of political uncertainties worldwide dampens companies’ investments, which has an impact on Germany’s foreign trade, the economic experts noted.
“Risks arising from an escalation of the trade war are particularly high. But a disorderly Brexit would also have costs,” Michelsen said. In case of a hard Brexit, Germany’s GDP would be 0.4 percent lower next year than with an orderly deal.
