EU Economy
Ifo Institute says German economy to gain impetus in 2015
By Michael Hennigan, Finfacts founder and editor
Dec 12, 2014 - 12:13 AM

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The Ifo Institute expects the German economy to gain impetus in 2015 and it forecasts economic output to increase by 1.5% in the year.

According to its researchers, the recovery will be strongly boosted by consumption, which is expected to grow by 1.7% in 2015, following a 1.1% increase in 2014.

"Falling oil prices and the slump in the euro exchange rate have helped to pull the economy out of the state of shock induced by the outbreak of the Ukraine crisis. Companies are now slightly more relaxed as they look to the future," said Prof Hans Werner-Sinn, president of the Ifo Institute, on Thursday in Munich.

According to the forecast by the Ifo Center for Business Cycle Analysis and Surveys led by Prof Timo Wollmershäuser, the unemployment rate is expected to fall slightly to 6.6% from 6.7%. This means that just under 2.9m people will be unemployed on annual average. Thanks to high levels of immigration, the number of working persons will reach a new record of 42.84m. Prices are expected to rise by 0.8%, which is slightly less than in 2014.

While German exports look set to grow by a remarkable 5.2% according to the Ifo forecast, imports will increase by as much as 5.8%. At the same time, the German current account surplus is expected to hit a new record of €222bn in 2015, after reaching €212bn in 2014.

Investments are forecast to increase by 2.0% in 2015, following 2.8% in 2014.

GDP in 2014 is also expected to grow by 1.5%. “This is partly due to the upwards revision of the official figures of Destatis, the German federal statistics office for previous quarters, which add up to a higher annual rate than we recently forecast,” said Wollmershäuser.

Summary (PDF, 172 KB)

German per capita standard of living highest in Europe; Ireland below EU average

Youth unemployment problem in Eurozone pre-dated crisis

ECB to consider QE in January; Cuts forecasts

German imports fell sharply in October; Exports at monthly record high

German jobs rise all in full-time employment unlike in UK, Ireland

Eurozone retail sales volume up in October - remains at 2004 level

Manufacturing PMI surveys show Germany, France & Italy contracted in November

German manufacturing wages are the highest of big industrial nations

Dreams of European Growth: Euro began with Germany, France and Italy in sick ward

Eurozone inflation fell to 0.3% in November; Jobless rate in Germany lowest in Europe in October

Manufacturing PMI surveys show Germany, France & Italy contracted in November

GDP up by 0.2% in Eurozone in Q3 2014 and up by 0.3% in EU28

German employment at record high

France's 10-year bond yield below 1% for first time; Draghi pushes for economic union

Stagnation in the Eurozone as German aversion to inflation to continue

German industrial production may expand only ¾% in 2015

European Commission forecasts slow recovery with very low inflation

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