Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/129760 
Year of Publication: 
2016
Citation: 
[Journal:] DIW Economic Bulletin [ISSN:] 2192-7219 [Volume:] 6 [Issue:] 11 [Publisher:] Deutsches Institut für Wirtschaftsforschung (DIW) [Place:] Berlin [Year:] 2016 [Pages:] 129-132
Publisher: 
Deutsches Institut für Wirtschaftsforschung (DIW), Berlin
Abstract: 
The global economy is stalling. Global production increased by only 3.3 percent last year-the lowest growth rate since the financial crisis-and is expected to rise by only 3.3 percent in 2016 as well, which is lower than originally predicted. The reason for the sluggish growth lies primarily in the changes taking place in the emerging countries: the Chinese economy continues to lose momentum, and low export revenues in the commodity-exporting countries are hindering economic activity. In the industrialized countries, however, the moderate pace of growth continues, not least due to increased purchasing power, which is in turn partly due to the decreased energy costs. In these countries, consumption remains an important pillar of growth and the labor market situation is improving. By contrast, investment remains subdued and only minor stimuli are expected from net exports since the momentum in the emerging countries is likely to increase only slightly in the coming year. The risks to the global economy are skewed to the downside. Increased uncertainty in the financial markets could worsen financing conditions. The euro area is facing the risk of deflation. In spite of the currently gloomy global economic environment, the German economy is developing robustly. Although weak demand in the overseas markets led to a decline in German's industrial production in the second half of 2015, it has been on the rise once again since the beginning of this year. During the forecast period, exports should benefit from a gradually improving global economy. Germany's strong domestic economy, which is fueled primarily by increased private consumption, serves as a critical growth-driver. Employment continues to grow and wage increases can still be observed. The money being spent on the housing, care, and integration of the refugees is boosting consumption-and although these costs are substantial, the public budget will continue to run high surpluses. Financial leeway, however, is expected to become more limited.The German economy is likely to grow by 1.6 percent this year by 1.6 percent, and by 1.5 percent in the coming year.
Subjects: 
business cycle forecast
economic outlook
JEL: 
E32
E66
F01
Document Type: 
Article

Files in This Item:
File
Size
514.24 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.