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Edition October 22, 2018 - Crédit Agricole S.A.
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  • Edition October 22, 2018

    Germany - Scenario 2018-2019: Heading for a growth slowdown

    After a year of sustained growth in 2017, Germany is now on the path of an expected slowdown of GDP at 1.9% this year and next. Germany benefits from solid domestic demand, driven by the dynamism of private and public consumption. Investment, although weakened by lower margins resulting from higher wage costs, remains the second factor supporting this growth. Net exports, on the other hand, will subtract a few points from GDP growth because of the acceleration of imports compared to exports.

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  • Content:

    - Overview
    - Focus: public finances and foreign trade
    - Latest economic trends
    - Backbone of our scenario

  • Extract:

    Household consumption is being driven by upbeat wage growth expectations within the next two years and by continuing robust job creation. It has retained its rank as the leading pillar of growth. Price increases for oil and commodities have knocked on into inflation although without substantially affecting household purchasing power, which is benefitting from a significant improvement in incomes. 

    Public consumption should pick up gradually with the deployment of the coalition programme that devotes a bigger share to public investment spending and pensions and to strengthening family support allowances. This extra spending will be funded by dipping into the budget surplus that has built up in recent years, although without hindering the downtrend in public debt, which is slated to fall below the 60% of GDP threshold this year.

  • Associative topics : Economics | Europe

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