Deutsche Konjunktur verliert an Fahrt
After having stagnated in the second half of 2018 GDP growth gained momentum in the first quarter of 2019. However, leading indicators such as business confidence and new orders suggest that growth rates will recede in the rest of this year. Domestic demand is expected to continue growing owed to incomes improving further. On the other hand, foreign demand will have a dampening effect on the German economy, since trade policy has taken a more protectionist stance in many countries. Summing up, GDP is expected to grow by 0.8% in this year and 1.4% in the next. The moderation of growth leaves its trace in the labor market. Unemployment rate is forecasted to fall slightly only to 5.0% in this year and 4.9% in the next. Inflation will remain moderate; consumer prices level will increase by 1.3% in this year and 1.4% in the next. The fiscal balance will still show a surplus, but the latter will become smaller over the forecast horizon.
Döhrn, R., G. Barabas, B. Blagov, A. Fuest, P. Jäger, R. Jessen, M. Micheli, S. Rujin and T. Schmidt (2019), Deutsche Konjunktur verliert an Fahrt. RWI Konjunkturberichte, 70, 2, 5-20