Reduced forecast after weak German data – Swedish Dagbladet

Reduced forecast after weak German data – Swedish Dagbladet

German exports fell 5.8 percent in August, according to the German statistical office, writes Reuters. That’s the biggest decline since 2009 and a further sign that Europe’s largest economy is krokna overshadowed by weak growth in the euro area and geopolitical unrest elsewhere in the world.

And it is not the first setback . Earlier this week came the weak figures also for the German new orders and GDP growth. In the second quarter the German economy shrank by 0.2 percent.

data may be Germany’s leading economic institutes to act. Now lowers its GDP forecast for the country’s growth in 2014 to 1.3 per cent, compared with 1.9 percent in the April forecast. For 2015 lowers its institutions GDP forecast to 1.2 percent from 2.0 percent, according to a press release.

This can be compared with the German government’s forecast for GDP growth, which is located at 1.8 percent this year and 2.0 percent next year.

According Institutes , the first signs of a weak economy in the labor market where employment growth has slowed and the number of unemployed has risen somewhat recently. The economic institutes expect in their forecasts that unemployment drops to 6.7 percent this year, from 6.9 percent in 2013, but then rises again to 6.8 percent next year.

Institutions finds that both the domestic and foreign demand is weak. Household confidence has deteriorated recently and at the same time companies remain cautious when it comes to investments.

And any help from abroad is not to be expected.

” Risks to the global economy is significant. This is due to the problems in China’s real estate market, but also on Russia’s conflict with the West. Moreover, perhaps even greater risks hiding in the balance sheets of banks in the euro area, “they write.

In the environment that is, with modest growth in the global economy and weakness in the euro area advocates Institutes economic policies that support growth and create more favorable investment conditions. They make room for a more investment-friendly tax system, especially through tax cuts and increased spending on areas that have the potential to foster growth.

Consumer prices are expected to increase by 1.0 percent this year and 1.4 percent next year while labor is predicted to increase by 1.8 percent and 2.3 percent respectively.