Ifo Economic Forecast 11 December 2014
Ifo Economic Forecast 2014/2015: German Economy Gradually Regains Impetus
After stagnating during the summer period, the German economy is gradually regaining impetus. Real gross domestic product (GDP) is expected to rise by 1.5% in 2014 and 2015 respectively.
The recovery will primarily be driven by the domestic economy, which is benefiting from the decline in crude oil prices. Equipment investment will gather fresh momentum as rising capacity utilisation rates necessitate more urgent investment in expansion. Construction investment is also expected to increase. Private consumption will rise at a similar pace to real disposable income. Export growth will accelerate thanks to the improved world economy and the enhanced price competitiveness of Germany’s export sector boosted by the euro’s weakening against the US dollar. Imports, however, will grow even faster due to the upturn expected in the domestic economy.