Germany Economic Outlook
November 20, 2018Chancellor Angela Merkel announced she will step down as CDU-party chief in December and as chancellor when her current term ends in 2021, which could create a power vacuum in the heart of Europe. The news came in the wake of the Bavarian and Hessian state elections in which the ‘grand coalition’ partners lost ground to the opposition and the far-right AfD. Against the backdrop of increasing political turmoil and following a series of disappointing monthly data, national accounts data showed that the economy shrank for the first time in over three years in the third quarter. This was chiefly due to a weaker external sector, which weighed on the economy and likely suffered from trade-related uncertainties and some one-off effects. Meanwhile, domestic demand painted a mixed picture with private consumption decreasing despite elevated consumer confidence and a low unemployment rate. The economy is expected to rebound in the fourth quarter. Business sentiment was robust in October and consumer sentiment remained elevated through November. The composite PMI, furthermore, continued to indicate improved business conditions, although the growth rate remains at a two-year low.
Germany Economic GrowthResilient domestic demand and a pick-up in exports growth should buttress the economy next year. Private consumption is expected to benefit from the minimum wage increase from 1 January. However, a disorderly Brexit and a flare-up in tensions between the EU and the United States remain dark clouds on the horizon. FocusEconomics Consensus Forecast panelists expect the economy to expand 1.7% in 2019, down 0.1 percentage points from last month’s forecast, and 1.6% in 2020.
Germany Economy Data
5 years of Germany economic forecasts for more than 30 economic indicators.
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|Bond Yield||0.27||0.41 %||Dec 12|
|Exchange Rate||1.14||0.65 %||Dec 12|
|Stock Market||10,929||-0.41 %||Dec 12|
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Germany Economic News
December 10, 2018
October trade data provided some relief amid questions over the state of the German economy.
December 7, 2018
Industrial output dropped 0.5% over the previous month in October, swinging from a revised 0.1% expansion in September (previously reported: +0.2% month-on-month).
November 28, 2018
Consumer confidence is expected to ease at the close of the year, with the forward-looking GfK Group Consumer Climate index expected to decrease from 10.6 points in November to 10.4 points in December.
November 26, 2018
Business confidence in Germany slipped from 102.9 in October to 102.0 in November, dropping for the third consecutive month but remaining above the 100-point mark that separates optimism from pessimism. A sectoral breakdown showed a broad-based malaise, with all four subsectors recording decreasing sentiment.
November 23, 2018
The German economy recorded its weakest performance since the first quarter of 2013 and the first quarterly contraction since Q1 2015.