- Uncertainty about further economic development remains considerable, partly in view of the protectionist US trade policy and geopolitical risks. We continue to believe that common sense will prevail and that negotiations can avoid a noticeable escalation of conflicts. Under this premise, the expansion of global trade in goods and services is likely to continue, albeit at a somewhat slower pace.
- At the end of 2018, the German economy provides a mixed picture. While various economic indicators had already indicated a slowdown in growth momentum over large parts of the year, real gross domestic product grew solidly in the first half of the year. In the third quarter, however, the economy then utterly slumped. This was mainly due to the automotive industry, which had considerable problems with the certification of vehicles according to the new WLTP emissions test procedure.
- We assume that the problems in the automotive sector associated with the new emission test will be largely resolved by the end of the first quarter of 2019 at the latest, and anticipate a "counter-movement" to the slump in growth in the third quarter for both the current and the coming quarter.
- Despite the recent setback, the overall economic situation in Germany can still be described as good. The domestic economic conditions for a continuation, albeit more moderate, of the upswing are still in place. This applies in particular to private consumption. The disposable income of private households will continue to grow quite strongly in nominal terms in 2019.
- All in all, despite the increased risks we expect the overall economic utilization in Germany to increase further in the coming year. With real GDP growth of 1.7% (2018: expected 1.5%), however, the rate of the previous years (2016 and 2017: 2.2% each) will no longer be reached.
Germany: Growth with obstacles