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2019: Only 1.3% GDP growth, snap elections a distinct possibility

November 4, 2018
Region:
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]

More documents about "Sectors and resources"

152 (109-120)
August 27, 2014
Region:
Analyst:
109
Besides transport and energy infrastructure, communications infrastructure is steadily gaining in importance in the regional competition to attract investment. One source of concern in particular though is the significant gulf in investment both between west German and east German federal states as well as between urban and rural regions. This is compounded by the problem that there is usually no viable business model for projects in rural areas without government subsidies. As there is no such thing as a standard blueprint for the broadband rollout with its huge investment requirements, every single project with its specific local features needs to undergo a critical economic feasibility analysis. On this basis, efforts should be taken to work out the best rollout model in terms of technology, funding and time horizon, respectively. In essence, the broadband rollout in Germany requires more government stimuli to foster private investment, but these efforts need to be coordinated and based on sound judgement. [more]
August 4, 2014
Region:
110
Economic growth probably suffered a worse setback in Q2 than initially presumed. We only expect stagnation now, but would no longer rule out a minimal decline. All in all, global economic conditions do not point to dynamic growth in H2. In particular, the tougher sanctions on Russia and the risk of further escalation of the conflict are set to weigh on business sentiment and investment activity in spite of Russia's low share in German exports. The debate triggered by ECB and Bundesbank comments about higher wage increases in Germany is likely to have a similar impact, even though the substance of the statements is less spectacular, on closer inspection, than the media hype. As uncertainties abound we have decided to refrain for now from making a downward revision to our full-year forecast of 1.8% GDP growth. [more]
July 31, 2014
111
The recently announced plans for a free trade agreement between China and the EU are momentous. China is the EU’s No. 1 supplier of goods and its third-largest export market. In turn, the EU is China’s largest trading partner. Going by current trends, EU-China annual bilateral trade could grow close to 1.5 times in a decade’s time. Not only goods but also services trade has large potential to grow. Chinese investment into the EU is still in its infancy but is likely to increase and become more broad-based, covering a wider range of industries and countries across Europe. New dynamism is expected from a bilateral investment agreement currently in negotiation and rising interest of Chinese investors in European companies, as shown by our compilation of Chinese M&A deals vis-à-vis the EU and Germany. Plenty of headroom exists for greater use of RMB in bilateral trade and investment relations. A note of caution concerns the risk of trade disputes which is unlikely to be removed in the near term. [more]
June 30, 2014
Region:
112
After a good start into 2014, manufacturing output in Germany looks set to grow by 4% in real terms in the full year. Even though business expectations have recently weakened somewhat, they remain in positive territory. Despite the good labour market situation in Germany inflation has decelerated noticeably. The outlook of a recovering global economy, a sliding euro and the introduction of a nation-wide minimum wage in Germany lead us to forecast that inflation is bottoming out. After hitting 1.1% in the current year it could pick up to 1.6% in 2015. [more]
June 26, 2014
Region:
113
Due to numerous political incentives, especially relating to the Renewable Energy Sources Act (EEG), the renewables share has increased sixfold since 1997 with regard to both primary energy consumption and electricity generation. Germany's first energy policy rethink (or Energiewende 1.0) not only sent costs ballooning but also impacted on electricity prices, the generation mix and emissions trading. And despite the EEG the contribution of wind/solar to primary energy consumption (PEC) was a mere 2%-plus in 2013. Overall, the “green electricity share” could reach roughly 60% by 2035. But how will the remaining 40% be generated – in view of the Energiewende 2.0? Depending on the scenario, the onus is more on natural gas or coal. [more]
May 26, 2014
Region:
Analyst:
114
The differences between the German automotive industry and the automotive industry in Germany will continue to expand in the coming years – the construction of production capacities in the growth markets is progressing. Expansion abroad does not have to be to the detriment of Germany as an automaking location. However, a stable or even positive development of Germany as an automotive manufacturing location cannot be taken for granted. We outline three potential scenarios for the development of Germany as an automaking location until 2025. In our most likely scenario domestic car output remains at around its current level until then. At the same time Germany benefits from a gradual recovery in western European car demand. In addition, smaller export markets become more important. [more]
May 23, 2014
Region:
115
From the standpoint of potential company founders, an inadequate supply of funding is a key issue especially in a start-up's early phases. Therefore, we welcome the efforts of the crowdfunding movement from an economic perspective, particularly with regard to growth. However, there is an urgent need for action aimed at eliminating the existing information asymmetries and conflicts of interest between company founders, funding platforms and investors. [more]
May 16, 2014
116
So far the West has chosen a reluctant approach in its attempt to contain Russia’s encroachment in Ukraine, refraining from economically or financially meaningful sanctions. The Ukraine crisis and further sanctions will not be inconsequential for the profile of the European recovery, but when looking at the distribution of costs, it seems that the West can afford to be tough towards Moscow. Obviously, the economic cost would be higher if Russian supply of energy to the West was jeopardized, but this would come at a very high price for Russia itself. [more]
May 5, 2014
Region:
117
Big data is increasingly becoming a factor in production, market competitiveness and, therefore, growth. Cutting-edge analysis technologies are making inroads into all areas of people’s lives and changing their day-to-day existence. Sensors, biometric identification and the general trends towards a convergence of information and communications technologies are driving the big data movement. Data has a commercial value – therefore the risks should not be underestimated. It is now a question of putting in place the necessary regulatory framework to allow these state-of-the-art methods and the technology that underpins them to properly flourish. [more]
April 23, 2014
Region:
Analyst:
118
Industry 4.0 will upgrade Germany as an industrial location by bringing on the fourth industrial revolution. With trade flows becoming increasingly internationally interlinked, the aspects associated with Industry 4.0 of automation, more flexible processes as well as horizontal and vertical integration will become more and more important features of a modern, competitive production structure. Especially for Germany with its particularly favourable basic conditions, Industry 4.0 provides the long-term major opportunity to consolidate the country's leading position in the competitive global marketplace – also relative to the fast-growing emerging markets. [more]
April 14, 2014
119
What about agriculture in Sub-Saharan Africa? Is it important to develop the sector or should efforts focus elsewhere? We argue that investments in agriculture and agribusiness are needed and that, ensuring efficient and sustainable agricultural production, they can drive economic growth and poverty reduction as well as fulfil both domestic and global demand for agricultural products. SSA offers both huge agricultural potential and fast-growing markets and there is increasing investor interest along the whole food supply chain. Challenges remain in terms of infrastructure, trade, skills and financing but there is increased commitment from governments and other partners for a sector with strong growth opportunities. [more]
February 18, 2014
120
Substantial changes in global economic weights over the past decades, in particular the rise of China and India, combined with major shifts on the energy supply side – the US shale revolution – have increasingly shifted the Gulf countries’ economic focus towards the Asian continent. Asia is now the GCC’s most important trade partner, both in terms of its hydrocarbon exports as well as imports of machinery, manufactured goods and food. The growing trade ties have also been accompanied by intensified bilateral investment relations. The observed shift promises to give the GCC countries better access to rapidly growing Asian retail markets, not only in energy but also other sectors such as telecommunications and Islamic finance. This should help the GCC in its ambition to diversify its economies. Migrant workers from Asia contribute significantly to economic prosperity and development in the Gulf monarchies, although the socio-economic implications stemming from the rapidly growing expatriate communities in the region will pose some challenges. [more]
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