Thursday, October 9, 2014

Poor data for Germany: economists: Merkel’s leftward slide tightened … – ABC Online

Poor data for Germany: economists: Merkel's leftward slide tightened … – ABC Online

Thursday, 09.10.2014, 11:00
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The German economy will grow significantly weaker this year than expected. Voice of the leading economic research institutes ahead in their fall. I also blame the federal government.

Leading economic researchers are more skeptical of the German economy. Economists expect for 2014 only 1.3 percent growth, as evidenced by the fall report published Thursday in the Federal Government.

This coming year there will be only a meager growth of 1.2 percent. Until now, experts had estimated a sharp rise in the gross domestic product by 1.9 percent next year and 2.0 percent. “The German economy is therefore in one – but not too strong – downturn,” says the paper. After shrinking the economic power in the spring it had probably been only a stagnation in the summer, the researchers write. “The economic engine is hardly back up to speed.”

The institutions shall make the policy of the Federal Government for the downturn in Germany partly responsible. “The prospects for the economy are therefore damped because headwind of economic policy is”, said the economists in their fall. “The retirement package and the introduction of the nationwide minimum wage inhibit microbial growth.” So prevented the “retirement gifts of the Federal Government” a reduction of the pension contribution. In addition, the grand coalition not use their scope to invest more. “All this affects probably a negative effect on private investment inclination from.”

Consumer sentiment has worsened

Other reasons are that the economy is slowly recovering in the Euro-zone as hoped. Moreover, the mood of the domestic consumer has deteriorated and the companies were reluctant to invest. “International crises such as the still smoldering Russian-Ukrainian conflict and the armed conflict in Syria and Iraq clouded the economic outlook in addition one.”

Few things speak that the company took off their reluctance to invest soon. The company will increase their expenditure on plant and machinery in this and next year by around four percent. In spring, the researchers had still predicted increases of just under six and over eight percent.

consequences for the labor market

The weaker economic strikes, according to the institutions and the job market. The number of unemployed in 2014 will fall slightly to 2.91 million in 2015 but rise again to 2.96 million. Nevertheless, there will be two years in a job record. The number of workers climb next year to 42.65 million, but slower than last. Reason for the development is that unemployment due to lack of skills the job search increasingly difficult, while many immigrants find a job.

The “community diagnosis” is created by four consortia of economic research institutes, including the Berlin DIW, the Munich-based Ifo, the RWI Essen and IWH are from Halle. It serves the Federal Government as a basis for their own forecast, which in turn is based on the assessment of the tax. Most recently, the OECD and the International Monetary Fund had expressed pessimistic for the German economy

Video:. Why the economy always returns to sway


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