Growth Survey: German growth, the IMF's Note 2 - Business Week

Despite

own economic strength of Germany remains difficulties in the euro area is not spared – and now so does the IMF dwindling German growth. The government in Berlin is still not gone bad.

div

The International Monetary Fund sees the immediate economic future of Germany skeptical. Given the large uncertainty in the euro-zone expect the experts from Washington to their regular contemporary Germany-testing a mini-growth of just 0.3 percent this year. In the months before Christmas, it could indeed be a slight acceleration – but only if just be declining uncertainty about the future course of the euro crisis and the political decisions
It is precisely the nervousness contributes significantly to the slowdown in growth.. While consumption in Germany have held quite well, but because of shrinking exports to the neighboring countries on the continent have taken the domestic industry their investments significantly. If it does not come to calm the heated debate on the one hand and an economic recovery on the southern periphery of the EU, “it is expected that the growth for a long time below its potential remains,” the IMF economists have noted.

With the world economy is gradually according to estimates by economists upwards. However big problem child remains the euro zone. The forecast for Germany was lowered.

Scientists see looming a little looser fiscal policy in Germany with joy. This is possible because the state had fulfilled all the requirements at the federal level, the debt ceiling before the time of the Maastricht criteria and also almost all einhalte again. But it was also necessary to stimulate the economy. Also in 2014, the IMF expects a moderate consolidation of Germany. In the past three years, the consolidation in the Federal Republic had surpassed the plans, based on the robust labor market and low interest rates. Now Germany must not overdo it though, especially given the weak economy.

concern is the professionals in Washington, still the European financial market. Although we have been able to stabilize the banking system, but it is still vulnerable. German banks could refinance low, but there is still exposure to hazardous sectors such as shipping, International real estate business and risky commitments abroad. Demand for credit remains weak because of the only times bobbing economy. It is important from the IMF point of view, especially as soon as possible a unified European banking system to create.
General Germany must remain a “anchor of stability in the region” because of its solidity. Helps keep particularly his reputation as a safe haven for international capital. Therefore, the IMF commends the ongoing leadership role of Germany in the further integration within the euro zone, especially for closer coordination in the financial and economic policy.

Looking at a stable and strong growth in the medium term, the IMF commends the activities with which the federal government wanted to increase the growth potential in recent years. Thus, the recruitment of skilled immigrants is just as welcome as tax incentives and the expansion of day care. Further strengthen these efforts, combined with a better reconciliation of family and work is promising. Productivity and growth could also be strengthened through the development and expansion of continental networks of railways to power lines. For the medium-term fiscal policy, the IMF warns the opposite of short-term recommendations: Given the demographics Germany should increase the efficiency of government spending

.