GERMAN ECONOMY

How to Get Off the Roller Coaster

Ein Mitarbeiter von BMW arbeitet am 10.04.2013 im BMW Werk in Regensburg (Bayern) an einem Auto. Foto: Marc Müller dpa [ Rechtehinweis: Verwendung weltweit, usage worldwide ]
The German economy is expected to grow 1.5 percent this year.
  • Why it matters

    Why it matters

    The Achilles heel of the German economy is persistently sluggish investment.

  • Facts

    Facts

    • Germany’s economy is expected to grow by some 1.5 percent this year and 1.25 percent the next.
    • The Policy Uncertainty Index shows that, since the global economic crisis of 2009, the political environment has not supported expectations necessary for an upswing in investments.
    • Germany’s chief export target region is not only economically fractured, but seriously threatened with political disintegration.
  • Audio

    Audio

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The spring round of German economic forecasts is over, and they point to the same projections across the board: Employment will continue to increase but at a reduced rate.

Domestic demand will dominate the economy, while net exports weaken slightly. And the German national budget will remain in the black despite additional burdens resulting from refugee policies.

All this will result in economic growth of 1.5 percent this year and 1.25 percent the next.

That’s not all that great, considering the boost resulting from low energy and raw material prices, as well as the European Central Bank’s ultra-expansive fiscal policies.

But it’s not all that bad either, considering the duration of this upswing. At any rate, without a clear direction for years, the economy is on a roller-coaster ride.

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