German Economy Stagnating – Now is the Time to Strengthen Growth: Joint Economic Forecast Autumn 2014
The German economy will grow by 1.3 percent this year and by 1.2 percent in 2015, predict the economic research institutes involved in the Joint Economic Forecast in their autumn report. According to the report, Germany’s economy has cooled down markedly. With economic output falling in the second quarter and stagnating in the third quarter of 2014, the engine for economic growth is proving hard to rev up again. Both domestic and foreign demand is weak: the consumer climate deteriorated recently and companies remain cautious about investment. The moderate pace of growth in the world economy and the low level of economic impetus in the euro area over the forecasting period are also having a negative impact. In this environment the economic research institutes are in favour of strengthening growth and creating more favourable investment conditions. They see financial scope for a more investment-friendly tax system and higher spending on areas that promote growth like physical and human capital.