In the coming year, the economy is expected to grow less strongly. Nevertheless, the Minister of Economics Peter Altmaier strives for optimism.
The Federal Government is looking more skeptically at the economy in the coming year. The economy is expected to grow by only 1.0 percent in 2020, which is expected to be noticeably lower than 1.5 percent in the spring, the ministry of economics said Thursday on its new economic forecast, confirming a recent Reuters report.
“But even if the prospects are currently subdued, there is no threat of economic crisis,” said Minister Peter Altmaier. The export-oriented industry is under pressure due to trade conflicts, Brexit and other uncertainties. “However, the domestic economy is still intact, employment and income are rising and the construction sector is still booming,” said the CDU politician. By the end of 2020, the number of people in employment will increase to 45.4 million.
The original target was missed
For the current year, the government continues to expect meager growth of 0.5 percent. By comparison, at the beginning of the year it had estimated 1.8 percent. But the export-heavy economy – and especially the industry – suffers from international trade conflicts and uncertainty caused by Britain’s exit from the EU. For example, world trade has stalled since 2018, the ministry said.
“In particular, the global weakness in industrial and investment burden the exports of German industry.” However, development in international trade is likely to bottom out soon, they said.
Altmaier affirmed that he wanted to strengthen companies and stimulate the economy with his proposals for SMEs and industry. “We now need growth policy with tax relief and bureaucracy reduction, market-based solutions in the energy transition, investments in future technologies and more digitalization efforts.”
In the second quarter of 2019, the German economy shrank slightly. Experts expect that there was also a minus in the third quarter. Then Germany would officially be in recession. The data is not yet available.
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