Unfavorable external economic conditions, a shortage of skilled workers and capacity bottlenecks slow down the economy in the opinion of the business sector - and to a much greater extent than previously assumed. Therefore, in its annual report, the German Council of Economic Experts for the Review of Macroeconomic Development revised its growth forecast for this year drastically downwards once again. The gross domestic product will only grow by 1.6 percent and in 2019 by only 1.5 percent, write the scholars.
Originally, the German Council of Economic Experts, which presented Chancellor Angela Merkel with his report on Wednesday, assumed growth rates of 2.3 and 1.8 percent. In September, however, the economists had already revised the forecast down to 1.7 and 1.9 percent, respectively. The five-member panel would thus be more pessimistic than the Federal Government, which predicts 1.8 percent for both years.
The reason for the slowdown in growth in the annual report is the less favorable external environment, including concerns about a US trade dispute and a disorderly EU exit from the UK.
Great challenges
"The German economy is facing great challenges," warn the economists. At the international level, this is above all the uncertain future of the multilateral global economic order. However, the situation is not yet comparable to a trade war as in the twenties and thirties. At national level, demographic change is the main challenge. A gradual increase in the statutory retirement age is needed.
The boss of the economic ways sees Germany also in view of a gloomy economic situation before important points. "Above all, I would like to see a clear line for the future, which gives more space to the question of how wealth can be created in the future," said Christoph Schmidt. He recommended that the federal government completely abolish the solidarity surcharge. The chosen form of relief over an exemption limit was "pronounced anti-incentive". The rental price brake, the researchers thinks harmful.
The Expert Council for the Assessment of Macroeconomic Development was established by law in 1963 to advise policy makers. Chairman is the economist Christoph Schmidt. The committee also includes Peter Bofinger, Lars Feld, Isabel Schnabel and Volker Wieland.
Editor's note: At this point, an outdated report was first published, which did not refer to the annual report of the economic systems, but the autumn report of the economic research institutes. We corrected the mistake.
