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Ifo Institute for Economic Research raised forecast for German economy growth

The Munich-based Institute for Economic Research (Ifo) envisages economic growth of 1.9% for Germany this year and a slight slowdown to 1.5% for the next year. The economists confirm, the given earlier in the autumn together with other leading institutes, forecast for the current year, but slightly increase forecast for 2017.

“All signs indicate that the fourth quarter of 2016 will be stronger than what we expected”, said the president of the Institute for Economic Research (Ifo), Clemens Fuest. “This upturn will accompany us during the next year”, added he.

In June, however, the autonomous forecast Institute for Economic Research (Ifo) economists predicted that the gross domestic product (GDP) of Germany will grow by 1.8% in 2016 and 1.6% for 2017 For 2018 they predict on Friday an increase in GDP of 1.7%.

Other research institutes have already left in recent days with forecasts for an increase of this magnitude. For example, the Berlin-based German Institute for Economic Research (DIW) and Esenski (RWI) predicted GDP growth of 1.8% this year and 1.2% next year. The economists from the Institute for Economic Research in Halle (IWH) estimate that this year the German economy will grow by 1.9% and in 2017 – by 1.3%.

Even more optimistic speak of Kiel-based Institute for World Economics, which analysts believe that despite international uncertainty will have a GDP growth of 1.9% this year and 1.7% next year, while for 2018, the forecast growth of 2.0%.

President of the Ifo Clemens Fustel stresses that the change of pace from 2016 to 2017 only because the smaller number of working days. The number of Germans of working age is expected to continue to rise from 43.5 million people this year to 43.8 million people next year and 44.2 million people in 2018. The forecast for the number of unemployed remain stable at levels in three years at around 2.7 million people, despite the influx of refugees labor market. Thus, the unemployment rate will amount to 6.1%.

The private consumption in Germany will have estimated growth of 1.9% in 2019, but in 2017 and 2018 only 1.2%. The gross investment in facilities this year will account growth of 2.2% this year, 1.8% in 2017 and 3.1% in 2018.

Because of the costs of the refugees, however, according to calculations of the Ifo, the budget surplus of Germany will fall from 21.5 billion EUR this year to 11.6 billion EUR next year and to 9.2 billion EUR in 2018.

Due to the expiration of the effect of lower oil prices the experts expect acceleration of inflation of 0.5% this year to 1.5% next year and 1.7% in 2018.

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