Daily Management Review

Association of German Banks: Investments are the weakest link in the German economy


10/04/2018


The Association of German Banks (Bankenverband, BdB) called a significant slowdown in private investment the weakness of the German economy and slightly reduced the forecast for GDP growth for 2019, reports Reuters.



tjuel
tjuel
Now the association predicts a 1.8% growth in Europe’s largest economy compared with a previous estimate of 1.9%. This year, BdB estimates that growth will куфср 1.9%.

“Given the escalation of the trade conflict and the difficulties that some developing countries are having, the world economy is facing the threat of slipping into a dangerous territory,” said BdB managing director Christian Ossig.

“We assume that the risks will remain manageable,” he said, adding that Germany’s economy should remain stable, despite growth rates below last year’s 2.2%.

Last month, the German government also lowered its growth forecast for this year to about 2%, saying that companies did not invest enough to achieve higher growth rates because they lacked skilled workers to increase production.

According to Eurostat, the German economy in Q2 increased by 0.5% in quarterly and by 1.9% in annual terms. In Q1, growth was 0.4% and 2%, respectively.

The German economy relies on private consumption and government spending to grow amid weakening exports. The service sector mitigates the effects of slowing production.

"Judging by the profits of companies, high capacity utilization, sustainable economic growth and very low interest rates, the investments should have increased much more," said Ossig.

BdB lowered forecasts for private investment in engineering and construction for 2018 and 2019. It is expected that investment in engineering next year will grow by 3.1% compared with the previous forecast of 3.6%.

The association also stated that the European Central Bank must put an end to its negative interest rate policy.

At a meeting in September, the ECB left the interest rate on loans at zero, the rate on deposits - at minus 0.4% per annum, the rate on margin loans - at 0.25% per annum. The Central Bank reiterated that it intends to maintain key rates at their current levels at least until the end of the summer of 2019.

The regulator also confirmed that net asset purchases will be terminated by the end of December.

However, the acceleration of inflation in some countries of the region has provoked calls for a more rapid tightening of monetary policy. The head of the Munich Institute for Economic Research (Ifo), Clemens Fust, said that if inflation in the eurozone remains above 2%, the ECB should consider raising the cost of borrowing earlier than currently planned.

source: reuters.com






Science & Technology

What trends will be affecting the health sector in the coming years?

Deloitte identifies main cyber threats for power industry

Zenuity To Take Self Driving Car Road Test In Sweden With Permission

Researchers: Half of Facebook users is fake

Amazon’s Ring gets in a privacy scandal

Facebook Is Creating A Stablecoin For Its WhatsApp Users

IBM offers to use the first quantum computer

Passport Numbers Of 5 Million Customers Hacked: Concedes Marriott

China Lifts Approval Freeze On New Video Games Launch

Concentrated Solar Plant System To Dispatch Electricity To The Grid On Demand

World Politics

World & Politics

AirHelp expects up to 33 th of cancellations and flight delays per day all over the world in 2019

Far-right and Catalonia: New elections in Spain

Trump is losing rating because of shutdown

Hanoi, Vietnam Chosen As Place For 2nd Summit Between Trump And Kim Jong-Un

US, China to hold new negotiations in Beijing

Human Rights Not To Be Dissociated From Stability, Macron Tells Sisi

Brexit Hijack Is Not The Parliament’s Right

Macedonia ignites political crisis in Greece