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Current Account Surplus: Policy Makers Virtually Powerless

Crane lifting bis container in yard © bugphai – iStockphotoGermany’s current account surplus is set to remain very high for the foreseeable future, with German policy makers largely unable to prevent it. Due to either political or technical obstacles, there is little chance that specific measures to reduce the German current account balance can be implemented on the necessary scale. That is the finding of a report prepared by the Kiel Institute on behalf of the Federal Ministry of Finance. Read more...


Joint Economic Forecast—Upturn Remains Robust

GD_teaser1Twitter-FB_Bild_984px.jpgThe German economic upturn has gained both in terms of strength and breadth. In addition to consumer spending, external trade and investments are now also contributing to economic expansion. These are the conclusions drawn by the economic research institutes in their autumn report for the German federal government. Gross Domestic Product is likely to grow by 1.9 percent this year and by 2 percent in 2019. Read more...


Economic forecast: German economy approaches boom phase

Deutschland, Hamburg, Container Hafen © Tuned_In – iStockphotoGermany’s economy is expanding at a faster pace than is healthy for it. According to the current economic forecast by the Kiel Institute for the World Economy (IfW) Gross Domestic Product (GDP) is likely to grow by 2 per cent this year, 2.2 per cent next year and 2.1 per cent in the year 2019. As a result, the capacity over-utilisation is increasing, making a painful correction at a later date more likely. A sharp increase in economic growth in the euro area argues in favour of the ECB abandoning its low interest rate policy.


Economic Forecast: German Economy in Overdrive

The production line for the assembly of new vehicles © dizfoto1973 - Fotolia.comThe German economy is approaching boom territory. GDP growth of 1.7 percent is likely in 2017, rising to 2.0 percent in 2018. Macroeconomic capacity utilization is running at above-average levels and will continue to rise. Six years into the recovery, it will reach a peak not seen since the boom year of 2007. Public budgets continue to register record surpluses. Read more...


Joint Economic Forecast Spring 2017: Upturn in Germany Strengthens in Spite of Global Economic Risks.

Hafen Hamburg pixabay cc0The German economy is already in the fifth year of a moderate upturn. According to the Gemeinschaftsdiagnose (GD, joint economic forecast) that was prepared by Germany’s five leading economic research institutes on behalf of the Federal Government, capacity utilization is gradually increasing, and aggregate production capacities are now likely to have slightly exceeded their normal utilisation levels. Read more...


Economic Outlook: Broad-based Expansion in Germany

Crane lifting bis container in yard © bugphai – iStockphotoAs it enters its fifth year, Germany's recovery remains robust. Various early indicators are trending clearly upward, and industrial order books are full. GDP growth in 2017 is likely to be 1.7 percent, before rising to 2.0 percent in 2018. Growth is no longer being driven solely by consumer spending. Inflation is ex-pected to reach 1.8 percent this year. 


Europe´s Economy on a Solid Growth Path

LKW mit Container im Hamburger Hafen © thomaslerchphoto - Fotolia.comTen of the most respected economic forecasting and research institutes in Europe, including the Kiel Institute, see Europe´s economy on a solid growth path. According to a joint forecast, gross domestic product in the euro area should continue to grow moderately in the coming two years and unemployment will fall. Inflation should remain at 1.4 per cent, well below the target value of the European Central Bank. In a detailed analysis of the Brexit, the institutes consider significant possible consequences in the long run.


Extended QE adds risks for financial stability

Draghi_Monetary Dialogue_(c) European Union 2016_Source EP.jpgThe essence of the most recent extension of the ECB’s QE programme boils down to “more of the same for longer”, making the time dimension the key factor with respect to risks for financial stability. While the extra nine months are not a game changer, the distortive allocative side-effects of artificially low interest rates grow with the length of the extraordinary monetary policy stance. These findings were given by researchers of the Kiel Institute to the European Parliament for their Monetary Dialogue with the ECB. The analysis also focused on a view below the macroeconomic surface.
Read the Briefing Paper (external website)