Economists: the economy is only picking up slowly
The bottom of the trough in german industry seems to be in sight or even already passed – but the economy still needs time to recover.
Economists at leading financial institutions in germany do not expect a rapid return to high growth rates in the federal republic of germany. "It will take time," said katharina utermohl of the allianz group in a survey conducted by the deutsche presse agency. She anticipates growth of 0.6 percent in the current year, the same as in 2019 according to the advance official calculation. A figure above 1.0 percent will not be reached again until 2021.
The labor market, which has been affected by slightly rising unemployment figures since may of last year, will not reverse in a flash either. Marc schattenberg of deutsche bank predicts a seasonal increase in the number of unemployed in january of 206,000 to around 2.433 million – a perfectly normal increase in this month, when seasonal workers in construction or from the christmas trade are no longer needed. Seasonally adjusted, there was a slight increase of 5000. The bank’s expert expects the economy to grow by 1.0 percent this year – but only because of a favorable distribution of working days in the calendar, which alone is responsible for 0.4 percentage points.
Like utermohl and schattenberg, their colleague fritzi kohler-geib, chief economist at k-gruppe, expects unemployment in germany to rise initially. "A reversal of the weak labor market trend can probably be expected by the end of the year at the earliest," she emphasized. The achilles’ heel remains the economic risks. Utermohl warned that a brexit without a free trade agreement with the EU is not yet off the table. And the U.S.-china trade dispute is by no means over either.
The high phase on the labor market, with steadily falling unemployment figures, is probably over, said jens-oliver niklasch from the landesbank baden-wurttemberg. "The economic situation is improving somewhat, the wait-and-see trend in industry seems to have stopped," he emphasized. "The worst fears regarding the industry have not come true for the time being," he emphasized. In terms of the economy, too, he sees more of a sideways movement. "That we now continue to write the success story, that would be a bit early now."