Economic activity in the world and in Germany is losing momentum

In the second half of 2018, the upturn of the German economy has stalled. The German export business has been weakening since the beginning of the year. Gross domestic product is expected to increase by 1.5% in 2018 and by 1.4% in 2019, which is roughly equal to the growth rate of economic capacity in Germany.

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Eine Hand in Nahaufnahme führt eine weiße Figur auf einem Schachbrett

Fairness pays off

When companies arbitrarily cut their wages, the motivation and productivity of the employees decrease – this is clear. Less obvious, however: Employees also become less productive even if it is their colleagues who are treated unfairly and not them.

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Brexit: The effects are already apparent

55
percent

Uncertainty is high among German firms: 55% of firms are still unsure about the consequences of Brexit for their business activity.

Source: DIHK
11
percent
German exports to the UK were also 11% lower in June 2018 compared to June 2016 when the referendum took place.
Source: Destatis

Press Releases

13.12.2018 • 21/2018

Economic activity in the world and in Germany is losing momentum

Abstract

In the second half of 2018, the upturn of the German economy has stalled. Production of the automotive industry declined because of delays in switching production to WLTP compliant cars. Irrespec-tively of this, the German export business has been weakening since the beginning of the year, since the global economy, burdened by the political uncertainties surrounding trade conflicts, the impending Brexit and the conflict over the Italian budget, was unable to keep up with the high momentum of 2017. “It is to be expected that the less benign external environment will not only dampen exports, but will also impact on companies’ investment and hiring decisions”, says Oliver Holtemöller, head of the Department Macroeconomics and vice president at Halle Institute for Economic Research (IWH). Gross domestic product is expected to increase by 1.5% in 2018 and by 1.4% in 2019, which is roughly equal to the growth rate of economic capacity in Germany.

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02.10.2018 • 20/2018

Presseeinladung zum Workshop: „Regionale Ungleichheit: Gleichwertige Lebensverhältnisse in Deutschland im Fokus“ am 8. und 9. Oktober 2018 in Halle (Saale)

Abstract

Ungleichheit in Deutschland: Was Wirtschaftskraft und Bevölkerungsentwicklung angeht, gibt es erhebliche Unterschiede zwischen Ost und West, zwischen Stadt und Land, zwischen Regionen mit alten Industrien und solchen mit vielen jungen Start-ups. Welche Konsequenzen sich aus diesen Unterschieden ergeben und wie die Politik darauf reagieren kann, diskutiert eine gemeinsame Veranstaltung des Instituts für Arbeitsmarkt- und Berufsforschung (IAB) und des Leibniz-Instituts für Wirtschaftsforschung Halle (IWH).

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27.09.2018 • 19/2018

Upswing in East Germany has slowed, but continues – implications of the joint forecast of the German economic research institutes in autumn 2018 and of official data for the Eastern German economy in the first half of 2018

Professor Dr Oliver Holtemöller
Abstract

The German institutes forecast a slowdown in the cyclical upswing in Germany. Foreign demand, in particular from other euro area countries, has eased, and capacity constraints make it increasingly difficult for companies to expand production. Both arguments apply to East Germany as well: high vacancy rates indicate that labour may be even scarcer than in the West despite higher unemployment. Moreover, a particularly high proportion of East German exports go to other European countries. Important drivers of growth in the East, however, are still intact: unlike the manufacturing sector, services have been rising a bit faster in recent years in East Germany than in the West. Providers of services benefit from significantly rising disposable incomes of private households, as employment is currently expanding healthily and at only a slightly slower pace than in West Germany, despite poorer demographic conditions. Retirement pensions in East Germany have also been increased considerably.

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27.09.2018 • 18/2018

Joint Economic Forecast Autumn 2018: Upturn Loses Momentum

Abstract

Berlin, 27 September – Germany’s leading economics research institutes have downwardly revised their forecasts for 2018 and 2019. They now expect economic output to increase by 1.7 percent in 2018, and not 2.2 percent as forecast in spring. They also scaled back their 2019 forecast slightly from 2.0 to 1.9 percent. These are the results of the Joint Economic Forecast for autumn 2018 that will be presented in Berlin on Thursday.

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Stefanie Müller
Stefanie Müller
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Veranstaltung
17
Dec 2018

14:15 - 15:45

IWH Research Seminar

The Stability of Dividends and Wages: Effects of Competitor Inflexibility

Referent: Professor Dr Alex Stomper Humboldt University of Berlin
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