Germany: Economic growth will pick up, but remains subdued – ABN AMRO

In view of analysts at ABN AMRO, GDP growth in Germany is expected to pick up in 2020.

Key Quotes

“Exports should regain strength around the start of the year, but we do not foresee a spectacular rebound. Importantly, we think that foreign trade and the global industrial sector are currently bottoming out, although the improvement is likely to remain rather lacklustre.”

“In fact, global fiscal and monetary policy stimulus has been rather modest since the start of the global slowdown in early 2018 and is not expected to result in a sharp rebound of the global economy. Moreover, uncertainty related to the trade conflict continues to weigh on the global economy.”

“With respect to Germany’s domestic demand, we expect fixed investment to remain weak for a while, as a delayed result of the contraction in the industrial sector and weaker profit growth. Private and government consumption, however, should grow solidly as both are supported by real wage growth and expansionary fiscal policy. We expect 0.6% yoy growth in 2020 and 1.5% yoy growth in 2021.”