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Outlook for 2020: DIW boss expects 150,000 new jobs

2019-12-31T08:47:08.132Z


DIW boss Marcel Fratzscher expects 150,000 additional jobs in 2020 and sees good reason for optimism. However, US President Trump can change that.



The German Institute for Economic Research (DIW) expects stable growth in the labor market in the coming year. "We are expecting 150,000 additional new jobs next year, which is very good," said DIW boss Marcel Fratzscher of the "Augsburger Allgemeine". The economist expects the economy to grow by 0.5 percent in the past year, despite economic risks, by 1.2 percent in the new year and by 1.4 percent in 2021.

"There is definitely reason for optimism," stressed Fratzscher. "We have a highly competitive economy, great export companies and an excellent job market," he added. The consulting firm EY and the Institute for Labor Market and Vocational Research also expect a stable labor market in 2020.

In addition to global trade conflicts and the Brexit at the end of January, he thought that American President Donald Trump in particular had a negative impact on the economy in Germany. "Many underestimate that Donald Trump is still buttoning up Germany and Europe. I'm afraid that will come in 2020 because elections in the United States."

Too much bureaucracy, too little tax on wealth

Politicians must therefore take countermeasures. The debate about a reduction in corporate tax misses the real problems, criticized Fratzscher. The problem lies in regulation and in excessive bureaucracy, which is often too slow. There was also a lack of specialists and long-term investment programs that the municipalities could rely on. "Unfortunately, we also have a poor digital infrastructure," said Fratzscher.

However, an investment program that is only scheduled to run for two years is doomed to fail, and companies and communities need planning security. "Because the municipalities that really need the money for schools, kindergartens and fast internet do not have the capacity to draw up construction plans and submit funding applications."

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The DIW boss also sees a discussion as to how assets can be more heavily involved in government spending. "My first preference is not wealth tax, which is expensive and difficult to collect," he said. This could lead to false incentives and capital flight. "My preferred form would be to increase property tax on land and real estate. And a fair inheritance tax that basically treats everyone the same," he added. "No other industrialized country taxes labor as heavily and wealth as little as Germany," said Fratzscher.

Source: spiegel

All business articles on 2019-12-31

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