Ger­many’s Ifo In­sti­tute ex­pects 1.5% growth in 2015

Financial Mirror (Cyprus) - - FRONT PAGE -

The Ifo In­sti­tute ex­pects the Ger­man econ­omy to gain im­pe­tus in 2015 with out­put in­creas­ing by 1.5% next year. Ac­cord­ing to its re­searchers, the re­cov­ery will be strongly boosted by con­sump­tion, which is ex­pected to grow by 1.7% in 2015, fol­low­ing a 1.1% in­crease in 2014.

“Fall­ing oil prices and the slump in the euro ex­change rate have helped to pull the econ­omy out of the state of shock in­duced by the out­break of the Ukraine cri­sis. Com­pa­nies are now slightly more re­laxed as they look to the fu­ture,” Prof. Sinn, Pres­i­dent of the Mu­nich-based Ifo In­sti­tute said on Thurs­day.

Ac­cord­ing to the fore­cast by the Ifo Cen­ter for Business Cy­cle Anal­y­sis and Sur­veys led by Prof. Timo Wollmer­shäuser, the un­em­ploy­ment rate is ex­pected to fall slightly to 6.6% from 6.7%. This means that just un­der 2.9 mln peo­ple will be un­em­ployed on an­nual av­er­age. Thanks to high lev­els of im­mi­gra­tion, the num­ber of work­ing per­sons will reach a new record of 42.84 mln. Prices are ex­pected to rise by 0.8%, which is slightly less than in 2014.

While Ger­man ex­ports look set to grow by a re­mark­able 5.2% ac­cord­ing to the Ifo fore­cast, im­ports will in­crease by as much as 5.8%.

At the same time, the Ger­man cur­rent ac­count sur­plus is ex­pected to hit a new record of 222 bln euros in 2015, after reach­ing 212 bln in 2014. In­vest­ments are fore­cast to in­crease by 2.0% in 2015, fol­low­ing 2.8% in 2014. GDP in 2014 is also ex­pected to grow by 1.5%. “This is partly due to the up­wards re­vi­sion of the of­fi­cial fig­ures of the Ger­man Fed­eral Statis­tics Of­fice for pre­vi­ous quarters, which add up to a higher an­nual rate than we re­cently fore­cast,” ex­plained Wollmer­shäuser.

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