The forecasts for the German economy are becoming increasingly optimistic. After the federal government raised its expectations for this year, the IMK union surprised on Wednesday with the best outlook so far: According to this, gross domestic product will fall by only 5.2 percent this year, in June the Institute for Macroeconomics and Business Cycle Research was inoperative 6.2 calculated. The Federal Ministry of Economy has adjusted its outlook from minus 6.2 to 5.8 percent. The Berlin DIW (minus 6.0 percent) and the Institut der Deutschen Wirtschaft (IW) with minus 6.25 percent are a little more skeptical. However, the last predictions mentioned were a few weeks ago.
Recovery is better than in the US
Expectations for 2021 also vary. Here is the DIW at the lower end with 4.1 percent; the federal government expects growth of 4.4 percent and IW 4.5 percent. IMK is at the top with 4.9 percent. “This means that the recovery in this country is slightly more dynamic than in other large countries in the eurozone and the United States,” he told IMK on Wednesday.
Economists attribute the fact that the economic and social effects of the economic downturn have remained manageable “to a large extent in the decisive crisis policy of the federal government.” Measures to support the economy, companies and incomes, in particular the contribution to short-term work, have proved their worth. This is especially true of the effects of the pandemic on jobs. According to IMK calculations, the number of unemployed will increase by approximately 450,000 this year, so that the annual average of approximately 2.71 million people will be unemployed. This corresponds to an unemployment rate of 5.9 percent.
3.35 million for part-time work
In the coming year, the economy will grow again, but this will hardly be seen in the statistics: IMK expects a minimal decline in the number of unemployed by a good 20,000 people and an unchanged rate. At the same time, a large number of short-term workers are returning. After 3.35 million short-term workers this year, an annual average of around 680,000 is expected in 2021.
Economists are rather skeptical of the capital goods industries, which include, in particular, mechanical engineering and mechanical engineering. “Investment in equipment remains a weakness of economic development,” IMK said. In this country, investment at the end of 2021 would still be a good ten percent lower than before the corona crisis. “The federal government should be prepared to react quickly if further investment is needed,” economists recommend. There are certain areas of activity, in particular climate protection, for which “huge private and public investments are needed”. “The sooner they are launched, the more stable the recovery will be and the more likely it is that German industry will continue to play an important role in the development and production of innovative products in the future,” the researchers write.
The state still has freedom
Financial space is still available despite direct government assistance, loan guarantees and economic stimulus packages. The government debt ratio will remain below 70 percent of gross domestic product in 2020.
In addition to the second corona wave, the risks in the coming months include the US exchange rate after the presidential election and chaotic Brexit.