Economists expect German economy to regain strength in 2014
2013-09-20 12:02:23
German leading economic institutes forecasted on Wednesday that German economy would regain strength in 2014 with the help of domestic demands.
Following a slight expected growth of 0.4 percent in 2013, German gross domestic product (GDP) would increase by 1.7 percent in next year, said German Institute for Economic Research (DIW) in a press release.
"German economy has overcome the weak start and then embarked on a moderate upward trend," said the Berlin-based institute.
The ongoing recession in the euro zone and a weak global economy dragged Germany's export-oriented economy.
It grew by 0.7 percent in the second quarter of 2013, following a stagnation in the first three months. Over the year of 2012, the economy was up by 0.7 percent. In 2010 and 2011, however, it expanded by 4.0 percent and 3.3 percent respectively.
DIW said that the main contributor to the future growth of German economy would be consumer spending, which was forecasted to increase by one percent this year, and by 1.4 percent the next.
Meanwhile, the institute said that the euro zone was on its way out of crisis, and there were growing signs that crisis countries would return to growth in the second half of this year.
"This is not only important for the solution of the debt crisis, but also helps German economy immensely. As an export nation, our economic strength stands or falls with the state of the countries around us," said Ferdinand Fichtner, Head of Economic Policy in DIW.
Rheinisch-Westfalisches Institut fur Wirtschaftsforschung (RWI), another economic institute based in Essen, also forecasted on Wednesday that German economy would grow by 0.4 percent in 2013.
For 2014, however, RWI was more optimistic. Economists in the institute expected that German GDP would increase by 1.9 percent in the year, giving domestic demand as the main driving power.
Labour market was expected to remain stable, with a jobless rate of 6.8 percent in 2013 and 6.7 percent in 2014. The institute also forecasted a moderate inflation rate of 1.6 percent this year and 1.8 percent in the next.
Currently, German government expected that German economy would grow by 0.5 percent in 2013, and by 1.6 percent in 2014.
The bright outlook of German economy is uplifting for German Chancellor Angela Merkel, who wishes to win a third term in office. In various occasions, the Chancellor has called her stewardship of the Europe's largest economy since 2009 "a successful four-year", and called for a chance for the "continuance of the success".
Polls on Wednesday showed that the union of Merkel's conservative CDU and its Bavarian sister party CSU earned a support rate of 39 percent, 13 percentage points higher than the center left Social Democrats, its main rival in the coming parliament election.