IfW in the News

German economic institutes warn of recession if trade dispute worsens

26.09.2018

Underlining the risks to Germany’s export-led economy, the leading German economic institutes cut their growth forecast.

Excerpt from the Article

(...) So far, Germany and Europe have been largely spared in the trade conflict emanating from the US, as the economic impact of the new tariffs is low, the researchers wrote in their joint fall report for the German government. The document was made available to media on Wednesday, a day ahead of its official publication.

But the researchers made clear that this situation teeters on a knife-edge. “Any escalation of the trade conflict, leading to considerable tariff increases by the US on a broad front, is likely to trigger a severe recession in Germany and Europe,” the report said. The institutes gave no time frame for that prospect.

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