25.01.2021 • 2/2021
High public deficits not only due to the pandemic – Medium-term options for fiscal policy
According to the IWH’s medium-term projection, Germany's gross domestic product will grow more slowly between 2020 and 2025 than before, not only because of the pandemic crisis, but also because the work force will decline. The resulting structural public deficits are, if the legal framework remains unchanged, likely to be higher than the debt brake allows. Consolidation measures, especially if they relate to government revenues, entail economic losses in the short term. “There is much to be said, also from a theoretical point of view, for not abolishing the debt brake, but for relaxing it to some extent,” says Oliver Holtemöller, head of the Department of Macroeconomics and vice president at Halle Institute for Economic Research (IWH).
Oliver Holtemöller
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16.12.2020 • 26/2020
New wave of infections delays economic recovery in Germany
The lockdown is causing production in Germany to decline at the end of the year. When restrictions will be relaxed again, the recovery is likely to pick up pace only slowly, partly because the temporary reduction in value-added taxes is expiring. In spring, milder temperatures and an increasing portion of the population being vaccinated are likely to support the German economy to expand more strongly. The Halle Institute for Economic Research (IWH) forecasts that gross domestic product will increase by 4.4% in 2021, following a 5% decline in 2020. In East Germany, both the decline and the recovery will be significantly less pronounced.
Oliver Holtemöller
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16.06.2020 • 9/2020
The economy adapts to the pandemic
In the first half of 2020, the pandemic has exacted a heavy toll on the German economy, causing a slump in production that will not be fully recovered within the next year. According to IWH summer economic forecast, gross domestic product is expected to contract by 5.1% in 2020 and to increase by 3.2% in 2021. The decline in production in Eastern Germany is likely to be less pronounced compared to Germany as a whole and estimated at 3.2% in 2020.
Oliver Holtemöller
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05.09.2019 • 18/2019
Downturn in Germany continues
Trade disputes are causing international trade in goods to decline this year. The manufacturing industry in Germany is particularly affected by this. However, a robust labour market is supporting the economy. According to IWH autumn economic forecast, German gross domestic product (GDP) will increase by 0.5% in 2019. At 1%, output growth in East Germany is likely to be significantly higher than in West Germany.
Oliver Holtemöller
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04.04.2019 • 9/2019
Joint Economic Forecast Spring 2019: Significant cooling of the economy – Political risks high
Berlin, April 4 – Germany’s leading economics research institutes have revised their forecasts for economic growth in 2019 significantly downward. They expect Germany’s gross domestic product to increase by 0.8%. This is more than one percentage point less than in autumn 2018, when the forecast was still for 1.9% growth. In contrast, the institutes confirm their previous forecast for the year 2020: gross domestic product is expected to increase by 1.8%. These are the results of the Joint Economic Forecast for spring 2019, which will be presented in Berlin on Thursday.
Oliver Holtemöller
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07.03.2019 • 7/2019
German economy will pick up speed only slowly
In winter of 2018/2019, the global economy weakened considerably, mainly due to economic policy risks. In Germany, the economy will pick up speed only slowly. According to IWH spring economic forecast, gross domestic product will increase by 0.5% in 2019. Growth in East Germany will amount to 0.7%.
Oliver Holtemöller
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18.12.2018 • 22/2018
IWH leads large scale EU research project on productivity
Is productivity growth slowing in industrialised countries? And if so, why? From the start of 2019, the Halle Institute for Economic Research (IWH) will be addressing these questions as the coordinator of a new EU project. Economists and statistics experts from nine European partners will collaborate on the three-year project, entitled MICROPROD. With a total budget of just under three million euros, it is the IWH’s largest EU project to date.
Steffen Müller
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13.12.2018 • 21/2018
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. Production of the automotive industry declined because of delays in switching production to WLTP compliant cars. Irrespectively 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.
Oliver Holtemöller
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14.06.2018 • 14/2018
Current economic outlook: German upswing is slowing down
In summer 2018, the world economy is still rather strong. Dynamics in the euro area, however, have declined markedly, and the cyclical upswing in Germany has almost stalled, due to weaker exports. “Gross domestic product will, according to this forecast, expand by 1.7% in 2018 and by 1.6% in 2019. Growth in East Germany will be about as strong as in Germany as a whole”, says Oliver Holtemöller, head of the Department Macroeconomics and vice president at IWH.
Oliver Holtemöller
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