Germany: Finance minister plays down the need for extra fiscal stimulus – ABN AMRO

According to reports in the German press, Germany’s finance minister Olaf Scholz has stated that Germany was prepared and able to counter an economic crisis with ‘many, many billions of euros’, but that that he did not consider Germany to be in an economic crisis, notes Aline Schuiling, senior economist at ABN AMRO.

Key Quotes

“According to Mr Schulz the German economy had cooled down mainly due to the weakening of the global economy and the consequences of the uncertainties related to Brexit. Mr Scholz repeated that the federal budget would be balanced and that no new debt would be issued next year, as planned. The draft 2020 budget (presented in March 2019), includes a rise in federal government spending by 1.7%, mainly by raising support for low and middle income families and by higher spending on defence and infrastructure.”

“Although government income probably will be lower than projected due to the economic downturn, reports in the German press suggest that lower tax income could be largely compensated by lower interest payments on government debt next year.  Based on early indications, we think the fiscal stimulus will be just 0.3% GDP next year compared to 0.5% GDP this year.”

“According to leaks to the press, Germany’s government is considering to set up special agencies that could take on new debt to invest in climate protection or infrastructure, without breaking the national rules for a balanced budget.”

“In other words, the government might give more clarity on its plans to set up any special funds on 20 September.”

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility.

Feed news

Latest Forex News

Editors’ Picks

EUR/USD extends recovery beyond 1.1050 on Saudi output headlines

News indicating that Saudi Arabia’s oil output would return to normal quicker than expected, lifted the market’s mood and weighed on the greenback. EUR/USD underpinned by improved Business Sentiment according to the German ZEW Survey.


GBP/USD rallies past 1.2500, reaches fresh multi-week highs

The GBP/USD pair is trading above the 1.2500 figure, getting a boost from easing demand for the greenback following relief news related to the crude oil market after the weekend attack to Saudi facilities.


USD/JPY drops back to recent range after hitting fresh 6-week highs

The USD/JPY pair spiked to 108.35, reaching the highest intraday level since August 1st and then pulled back to the 108.15/20 area.


Gold struggles to find direction, trades in tight range near critical $1,500 handle

The XAU/USD pair struggling to make a decisive move on Tuesday and continues to trade in a relatively tight range around the $1,500 handle.

Gold News

Saudi Arabia's oil output to be fully back online in next 2-3 weeks

Citing two sources briefed on the Saudi oil operations, Reuters reported that Saudi Arabia's oil output would return to normal levels quicker than initially thought.

Read more