Research Germany: Cruising along, but vulnerable

We think the current boom phase still has ‘air to run' with growth to remain above potential at 2.1% in 2018E and 1.9% in 2019E, before moderating to 1.6% in 2020E.
We expect domestic demand to rebound, not least due to higher public spending under the new government, while net exports would increasingly become a headwind to growth.
Risks to the growth outlook for the export-dependent German economy stem mainly from the external side amid the ongoing US-China trade spat and its implication for global trade.
The tight labour market has started to spill over to higher negotiated wages, leading us to expect a gradual rise in core inflation from H2 18 onwards.

Danske Research Team Danske Bank A/S

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Danske Research Team

Danske Bank A/S

Research is part of Danske Bank Markets and operate as Danske Bank's research department. The department monitors financial markets and economic trends of relevance to Danske Bank Markets and its clients.

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