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Economy: Germany is probably slipping past recession

2019-11-01T12:25:45.357Z


The big research institutes actually expect that Germany's economy shrank in the summer. The Kiel Institute for the World Economy is now surprisingly more optimistic.



The Kiel Institute for the World Economy (IfW) has adjusted its economic forecast - and looks now more confident on the economic development than a few weeks ago. German gross domestic product (GDP) stagnated in the third quarter compared to the previous quarter only, said the IfW. The researchers calculated on the basis of preliminary data for the euro area. Economic output there has probably risen by 0.2 percent.

In mid-September, the Institute for Germany had predicted a value of minus 0.3 percent. The Federal Statistical Office will publish a first estimate of the economy in the third quarter on 14 November.

"The economy in Germany was slightly firmer in the summer than had previously been expected, but overall the downturn continued, because overall economic utilization has fallen further," said IfW economist Stefan Kooths. "The already unimportant question of a technical recession is in tatters, and if anything, it is homeopathic."

Other research institutes still expect recession

A decline in economic output in at least two consecutive quarters is called a technical recession. This is only a mild recession in this case. The situation would be different if the economic output for the whole year shrinks compared to the previous year. Nobody expects this at the moment.

Most economists have assumed that German GDP contracted again in the summer, down 0.1 percent in the spring. Thus, the Munich Ifo Institute and the Essen RWI for the summer quarter so far expect a further decline of 0.1 percent. The Berlin DIW even expects a minus of 0.2 percent.

The IfW is part of the circle of research institutions that advise the government. Together with the Munich Ifo Institute, the Essen RWI, the Berlin DIW and the IWH from Halle, it presents an expert opinion on the German economy twice a year. In their autumn report, the researchers expect for 2019 only with a GDP increase of 0.5 percent. Previously, they had expected gross domestic product to grow by 0.8 percent.

Source: spiegel

All business articles on 2019-11-01

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