Joint Economic Forecast Autumn 2014
German Economy Stagnating – Now is the Time To Strengthen Growth
Oct 9, 2014
The German economy has cooled down. Gross domestic product (GDP) is expected to grow by 1.3 percent. The 68 percent projection interval ranges from 1.1 percent to 1.5 percent. The weakened world economy and subdued investment activity are acting as the main checks on economic development. Production will expand by 1.2 percent in the year ahead. However, the fact that 2015 will have more working days also has a role to play; and the expansion rate is only expected to be 1.0 percent after adjustments for calendar effects. In this environment the focus of economic policy should now be on strengthening growth and creating favourable investment conditions. A certain scope exists for using proactive fiscal policy to achieve this goal.