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  4. Dieter Bräuninger

Dieter Braeuninger

Analyst
European Policy Research

Topics:
General economic policy,
provision for old age, demography, health policy

Address:
Mainzer Landstraße 11-17
60329 Frankfurt
Germany

E-Mail:
dieter.braeuninger@db.com

Phone:
+49-69-910-31708

More documents written by Dieter Braeuninger

48 Documents
November 4, 2018
Region:
1
GDP stagnation in Q3 – 2019 forecast lowered to 1.3%. Despite signs that the WLTP effect is subsiding the recovery looks set to be slow. Export expectations and business sentiment in general have become more clouded on the back of the US/China trade conflict, the problems in the EMs and overall heightened economic uncertainty. Whilst we expect the economy to get back on track in the winter half-year, expansion rates well above potential have become unlikely in 2019. We have therefore trimmed our 2019 growth forecast to 1.3% (1.7%). (Also included in this issue: Auto industry, labour migration, the race for Chancellor Merkel’s succession) [more]
October 4, 2018
Region:
2
Weak currencies and economic difficulties in emerging markets dampen German exports. Over the past few months, the euro has appreciated against the currencies of many emerging markets which will likely curtail German exports to these countries in 2018 and 2019. In 2017, the ten largest German export markets among the emerging markets accounted for some 16% of total exports. According to our estimation model, German exports to this country group are set to increase by a nominal 3.5% to 4% in 2018 and 2019. This would be a noticeable loss of momentum compared with 2017 when exports increased by just over 7%. The country group’s share of total exports for the industrial sector is highest for traditional capital goods manufacturers, with mechanical engineering taking the lead. The ten emerging economies examined accounted for just over 22% of all exports in this sector in 2017. [more]
September 14, 2018
Region:
3
Since the last corporate tax overhaul in 2008, the need for reform has been continuously building in Germany. Given the ongoing criticism of Germany's current account surpluses, a reduction in corporate taxes would be a strong signal to provide new impulses to the sluggish domestic investment activity, thereby addressing a key issue of the current account discussion. The international trend towards lower tax rates also needs to be addressed, if Germany is to retain its competitiveness as a site for investment, innovation and jobs. [more]
September 4, 2018
Region:
4
German economy in H2 still goldilocks despite external headwinds. We maintain our forecast of around 0.5% quarterly GDP growth in both Q3 and Q4, following average growth of 0.4% in H1. The H1 growth composition, however, marginally lowers the annual average to 1.9% (2.0%) and risks remain more skewed to the downside. In Berlin, the Groko agreed on an expensive social policy package. Albeit medium- and long-term financing of the package is not secured, FM Scholz came up with an additional, even more costly idea for extended pension benefits. A silver lining could be if the Groko managed to launch a law on labour migration. (Also included in this issue: German manufacturing industry, shortage of qualified workers in the construction sector, corporate taxes) [more]
July 2, 2018
Region:
6
The month of June was marked by various political irritations which of course also had a certain impact on economies and markets. The US-EU trade conflicts seems set to broaden beyond steel and aluminium. The threat of imposing tariffs on US car imports will be felt particularly in the export-driven German car industry which already has to deal with stricter regulations and a cyclical slowdown in important export markets. On the domestic front, the German retail sector is facing ongoing structural change due to digitalisation. The German government crisis between the CDU and the Bavarian CSU over the course of the asylum policy is still not settled despite the rather constructive outcome of the EU summit. The various party bodies will convene and later on Monday there will be another meeting between Chancellor Merkel and Interior Minister Seehofer. In view of the factors weighing on economic sentiment, we consider our recent adjustment of our annual GDP growth forecast from 2.3% to 2% to be justified. [more]
May 8, 2018
Region:
7
Weaker recent data – too early to throw in the towel, but 2018 GDP forecast cut to 2%. Although German Q1 GDP growth now looks like reaching around ¼% qoq, we still expect some positive payback in Q2, as some temporary factors depressing activity should disappear. Corporate investment spending will be key for growth in the remainder of the year. Unfortunately, signals from proxy indicators have become somewhat mixed recently too. Notwithstanding a likely, albeit limited, Q2 rebound in activity, the strong drop in the expectations' component of the ifo business climate suggests that we have probably passed the peak in qoq growth rates in the current cycle. Due to the weaker Q1 we have lowered our GDP forecast for 2018 from 2.3% to 2.0%. (Also included in this issue: industrial producer and import prices, labour migration, fiscal policy) [more]
April 12, 2018
Region:
8
The EU institutions are about to decide on major new rules regarding the reception and the treatment of asylum applicants as well as their allocation among member states. The trigger for the intended reforms relate to the current regulatory framework’s shortcomings that emerged during the refugee crisis: an uneven sharing of responsibilities for asylum procedures and massive irregular migration within the EU. However, the Dublin procedure recast has stalled, as several member states strictly refuse the planned corrective mechanism for a fair sharing of responsibility. The prospects seem to be more favourable with regard to the harmonisation of the asylum procedures and conditions. [more]
March 7, 2018
Region:
9
From the start, the negotiations were ill-fated. To begin with, the SPD leadership rejected a revival of the grand coalition (Groko). Then, the partly diametrically opposed interests of the parties involved, seemingly abundant financial scope and a lack of interest in fundamental reforms on the part of the German population led to a – in many areas – mixed bag of measures which, on balance, aims to further increase governmental control of the business sector and society at the expense of individual freedom. However, at present, the predominant feeling is relief that Germany now has a “decent“ government. But not only the coalition partners may soon wonder whether the price is too high. [more]
February 8, 2018
Region:
10
The four-month deadlock following the inconclusive German federal elections was brought closer to its end with the coalition agreement between the CDU/CSU and the SPD. The last hurdle to Merkel's re-election is now the SPD membership ballot which is expected to give its approval, though at a thin margin. The agreement foresees significant investment in infrastructure and education but caters too much to permanent spending on social and pension policy given the largely cyclical nature of the budgetary leeway. Europe is supposed to take centre stage in the would-be coalition's policy – a signal which matters for Martin Schulz but less so for the member ballot and the German voter. The coalition commits itself to the transformation of the ESM and more spending on Europe but the red lines will only emerge when the details will be tabled. Surprisingly, the SPD will hold most of the major portfolios in the cabinet. With the foreign and the finance ministry the SPD got hold on the key portfolios for shaping the European policy course, although the key decisions will still be left to the chancellor. [more]
February 6, 2018
Region:
11
The economy continues to steam ahead, with quarterly GDP growth of 0.5% qoq in the winter half. A tight labour market and swelling order books are boosting the union's bargaining power so they are pushing hard for higher wages, although increases might fall short of expectations among workers and the ECB tower. Meanwhile in Berlin, Groko hopefuls are spending Germany's fiscal surpluses, seemingly unconcerned with demographic challenges and the fact that record low interest rates and above potential growth will not last. This party will likely go on for some time - maybe even a few years. However, the situation feels increasingly reminiscent of carnival revellers' popular song "Am Aschermittwoch ist alles vorbei" (It's all over on Ash Wednesday). [more]
December 15, 2017
Region:
12
With a growth rate of probably 2.3% in 2017, Germany delivered the main positive surprise in the industrial world. In 2018, German GDP looks set to expand by 2.3% again. If this forecast materialises, Germany will grow at an above-potential rate for the fifth year in a row. The upcoming wage round and resilient demand combined with the global decline in free capacities might, however, push up prices more strongly than currently expected. We already voiced concerns ahead of the Bundestag elections that the new government (just like its predecessor) might not pay sufficient attention to urgent challenges such as digitalisation, demographics and globalisation as the labour market situation is favourable. Now that forming a government has turned out to be unexpectedly difficult our concerns have increased. [more]
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