Germany’s Ifo Institute expects 1.5% growth in 2015
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.