1. Research
  2. Products & Topics
  3. Region
  4. Germany

Strong economy supports Merkel’s re-election chances

June 6, 2017
Region:
After Q1’s sturdy 0.6% qoq GDP growth, soft indicators do not signal any moderation of the growth momentum. Employment in 2017 so far, has been expanding at similar clip as in 2016, making our 1% consumption forecast for 2017 quite conservative. Exports have rebounded in the winter half – in line with global trade. The growth momentum of global trade seems to have peaked; therefore, we remain cautious, predicting 3.6% German export growth in 2017 after 2.7% last year. In combination with lingering geo-political uncertainty this will weigh on investment spending, where a utilization rate of 2pp above its long-term average suggests a still limited necessity to invest. Following Q1 GDP growth of 0.6% we have revised our 2017 GDP forecast to 1.3% (1.1%). Latest confidence surveys, however, hint at further upside potential and increasing risks of over-heating for 2018. Political observers in Germany have recently been focusing on the SPD’s ups and downs in the polls and the CDU’s reverse showing while smaller parties are fighting for public attention. From the present point of view (polls) a Jamaica coalition is the sole arithmetically feasible alternative to a renewed grand coalition after the September election. (Further topics: German industrial output – forecast for 2017; Corporate funding in Q1 – lending) [more]

More documents about "Germany"

262 (193-204)
March 12, 2015
Region:
Analyst:
193
In 2014, Germany exported goods worth EUR 1.1 tr (+3.7%), which represented a new record high. Conversely, German exports to Russia fell by 18% because of the latter's economic and political problems, with the declines in certain sectors even exceeding 30%. True, the share of total German exports going to Russia has decreased to only 2.6% (2013: 3.3%; 2012: 3.5%), but certain sectors and companies are nevertheless being hit hard by the decline. We expect exports to Russia to drop significantly in 2015, too. Out of Germany's major manufacturing sectors it is probably engineering that is suffering the most as Russia is still one of its biggest foreign markets. [more]
March 9, 2015
Region:
194
While the German economy is generally getting a growth boost from the slump in oil prices, the oil-producing countries are seeing their economic prospects deteriorate. This could bring pressure to bear on German goods exports to these countries, which totalled no less than EUR 73 bn in 2014 (export share: 6.4%), and trigger a 10-15% nominal decrease in 2015. The sectors in Germany that have particularly benefited so far from the oil producers' "petrodollar recycling" include mechanical engineering and other transport equipment (mainly aircraft). In these cases, both the export ratios and the shares of the oil countries in total sector exports are above average. [more]
March 2, 2015
Region:
195
The Q4 GDP details corroborate that the German economy ended 2014 on a high note (+0.7% qoq vs +0.1% in Q3) as private consumption received a substantial stimulus from the drop of the oil prices. We increase our 2015 GDP forecast to 2.0% from 1.4% previously. This is especially due to the much larger carry-over effect courtesy of the marked Q4 GDP growth. In addition, we raise our Q1 GDP forecast to 0.5% qoq as the renewed oil price drop will boost consumption again. Sentiment also improved further in January/February with ifo expectations and the composite PMI pointing to 0.5% and 0.4% growth, respectively. [more]
February 20, 2015
Region:
196
The commercial and data protection foundations for debate about big data may well already be in place. But far removed from the debate about monetisation and data misuse there is another world in which data applications, regardless of their data volumes, can provide a valuable economic benefit to society. Our increasingly digital and data-driven economy enables us to more rapidly detect potential ways to boost efficiency and productivity and subject them to closer scrutiny. In this context, the desire for greater transparency, participation and collaboration provides an important motive for experimenting ultimately in fact with new forms of democratic processes. The initially exponential growth in the volume of data and its intelligent evaluation provide the fertile breeding ground needed for innovation and economic growth in the digital age. [more]
February 6, 2015
Region:
Analyst:
197
Manufacturing output in Germany rose by 1.9% in real terms in 2014. Q4 helped to end the year on an upbeat note, as a decline in output at the end of 2014 – which we had still been forecasting in autumn – did not materialise. The outlook for 2015 has also improved. German industry is getting a boost from the depreciation of the euro, which is materialising faster and more heavily than expected, as well as from the surprisingly steep drop in the oil price. We have therefore recently raised our forecast for manufacturing output in 2015 in real terms ¾% to 1.5%. [more]
February 2, 2015
Region:
198
Late last year we raised our GDP forecast for Germany from 0.8% to 1.0% on account of the steep downside correction on expectations for oil prices. We now expect German GDP growth to hit 1.4% in 2015. Reasons: Growth slightly exceeded expectations in Q4 2014; the oil price forecast for 2015 has been lowered again; and the euro has fallen more sharply against the US dollar than anticipated. Given this good outlook for the economy Germany's public budgets are likely to show a slight surplus again in 2015. Moreover, the current account surplus is set to jump to 8% of GDP. This suggests there will be further calls for Germany to use its fiscal room for manoeuvre to pursue a public investment programme. Also, international criticism of German economic policy is likely to grow louder. Further topics in this issue: German industrial output forecast upped to 1.5%, 10 "golden" rules for ifo, PMI and Co., The view from Berlin. [more]
January 27, 2015
Region:
Analyst:
199
SMEs' access to finance problem constitutes a considerable impediment to the recovery in many European countries, therefore prompting calls for policy action. Among the options to spur bank lending to SMEs, covered bonds backed by SME loans are currently discussed as a potential remedy. Despite SME-covered bonds offering lucrative features for investors and issuers alike, there are significant constraints that may limit their potential to revitalise bank lending to SMEs for the time being. [more]
January 9, 2015
Region:
Analyst:
200
Germany's service sectors have shown themselves to be keener to invest than industry in recent years. The net fixed assets held by the service sectors grew by almost 28% in real terms between 1995 and 2012, although their growth rate has slowed over time. By contrast, the capital stock in the industrial sectors has shrunk by 1.6% in real terms. While, on the one hand, politicians in Germany have been expressing regret or even voicing criticism over the country's current lack of capital spending, on the other they have recently introduced measures (such as their policies on pensions and labour markets) that are hampering investment in Germany rather than stimulating it; this approach is inconsistent. [more]
January 6, 2015
Region:
201
Following a weak winter half in 2014/15 the economy looks likely to regain its footing as 2015 progresses. However, sluggish performance at the turn of the year means growth will probably average only 1% in 2015 after 1.4% in 2014. It is encouraging, however, that private consumption should remain a major pillar of growth, whereas net exports are likely to have a neutral impact. Nonetheless, signs are increasing that some – in our opinion misguided – economic policy moves (such as the introduction of a nationwide minimum wage as well as an enhanced pensions package) are weighing on the labour market and thus on consumption. Given a weakening of cyclical activity and the costs of economic policy measures, we expect the general government budget to be slightly in deficit in 2015. [more]
December 2, 2014
Region:
202
Underlying growth of the German economy has slowed in Q3. After average quarterly growth rates of over 0.3% qoq in the last 1 ½ years, GDP expanded just 0.1% in Q3. We expect about stagnation in the next two quarters with a risk of a negative print as sentiment has weakened further in October/November. The little momentum of global trade since 2012 points towards structural changes, which will affect German exports in particular. German export growth should therefore remain relatively muted during the next few years. We forecast average real German export growth at the lower end of a range of 4%-6% between 2014 and 2019, which should be buttressed by a depreciation of the euro. [more]
November 13, 2014
Region:
Analyst:
203
German engineering firms must prepare to confront several trends over the medium term. The first of these is that a new, bipolar world of engineering markets is emerging. The United States and (once again) China are set to become especially promising centres of growth going forward. Further future trends are, secondly, the gradual shift in product focus towards customised system solutions; thirdly, the growing importance of not purely price-related competitive factors; and fourthly, the reconfiguration of the global division of labour in the engineering sector as the classic distinction between producer countries focusing on standard machinery and others focusing on speciality equipment becomes increasingly untenable. Provided that traditional suppliers to the manufacturing sector manage to spot the new mega-trends in good time, they will be able to build on these to develop promising strategies that enable them to adapt, survive and – ultimately – grow. [more]
November 11, 2014
Region:
204
In sections of the financial industry there are many web- and data-based financial products and services that customers cannot obtain from either their bank or a similar provider. Non-bank, primarily technology-driven providers are increasingly entering the markets for less knowledge-intensive and easily standardisable financial services. Despite valuable comparative advantages that traditional banks have to offer they need to undergo a radical course of innovation therapy during the digital transformation process. To this end modern data analysis methods should be used just as routinely as a seamlessly integrated web of all distribution channels. Modern technologies and appropriate finance-specific internet services need to be implemented efficiently and above all in a timely manner. Strengthening one's own brand and identity as well as the obligation to handle client data confidentially will also help to deliver a sustained increase in customer satisfaction and loyalty. [more]
6.4.1