In the near-term a rocky road still lies ahead for the German economy with renewed headwinds to external demand, but over time we expect the growth pace to gather some speed reaching 1.6% in 2021.

The domestic side of the economy remains fairly resilient and rising real wages and fiscal stimulus should continue to underpin growth.

We project core inflation pressures to continue to build up in light of a strong labour market and dynamic wage growth.

Many risks to the growth outlook for the German economy continue to linger from the external side, the most prominent remaining the threat of US car tariffs.

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