Increased recession risk also for 2020

With a large portion of luck, the German economy may have narrowly avoided a recession in the third quarter of 2019. However, the ongoing decline in business expectations suggests that the risk of a recession will remain acute in 2020. The subdued outlook for world trade and the German car industry as well as lingering elevated political uncertainty surrounding trade and Brexit is simply too much to handle for the German economy. Up until now, construction investment and private consumption have kept the German economy afloat. However, the weakness in industry is increasingly spreading to other sectors.  In 2019 and 2020, we expect the German economy to grow only 0.6% and hence only about half as fast as the eurozone as a whole.