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Outlook for German economy brightens

Christian Fernsby ▼ | November 28, 2019
The outlook for Germany's economy brightened as the monthly index issued by the German Institute for Economic Research (DIW) climbed by 1.5 points to 91.5 points in November.
Germany river cargo ship
European economy   Germany river cargo ship
Following falling economic output in the last quarter, economic output was "likely to rise" by 0.1 percent in the final quarter of the year, the DIW stated.

Topics: German economy

"As industry gradually stabilizes, the risk of contagion effects on other sectors of the economy is likely to have diminished," said Simon Junker, deputy head in the forecasting and economic policy department of DIW.

Private households in Germany continued to benefit from rising incomes. Both the employment level and wages in Germany continued to rise, although at a "slower pace than before," DIW noted.

Consumption would continue to grow perceptibly, thus "boosting consumer related sectors," said DIW.

"Recently there has been more positive news from the industry which has been badly shaken for a long time," said Claus Michelsen, head of the forecasting and economic policy department of the DIW.

"Even if industrial production is likely to shrink again somewhat at the end of the year, expectations have brightened and the order situation has improved," added Michelsen.

For the final quarter of the year, the first increase in orders in almost two years was "on the horizon" and deliveries to Germany's trading partners were also "likely to increase further," DIW noted.

However, not all economic indicators paint such a positive picture for Germany's industry exports. The ifo export expectations of the industry sector in Germany fell from minus 1.4 to minus 1.7 points in November as the mood among exporters had "deteriorated".

"The global economy is weak," said Clemens Fuest, president of the ifo Institute for Economic Research, adding "As a result, impulses for the German export economy are rather scarce."


 

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