QII-2019 QUARTERLY REPORT GERMANY
Back to growth without industry Services make up for decreasing industrial value added
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The German economy started off the year 2019 with solid growth. Gross domestic product increased by 0.4 percent in the first quarter 2019 after price, calendar and seasonal adjustment, allaying fears of recession for now following the 0.2 percent drop in the third and stagnation in the fourth quarter 2018.
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Global economic risks are immense. A disorderly Brexit and massive disputes in international trade policy are unsettling investors around the world and already curbing global trade growth considerably.
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Despite increased global economic risks, corporate investment activity is still pointing up. In early 2019, plant and equipment investment continued to rise (up 2.3 percent year-on-year). Investment in buildings was up by 5.3 percent year-on-year, investment in other assets dropped slightly (down 0.1 percent).
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Private consumption up by only 1.1 percent year-on-year despite steep increase in employment and, in part, considerable wage increases. Public consumption increased by 1.4 percent year-on-year.
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The real export of goods and services increased by 1.5 percent in the first quarter. Real imports increased by 4.1 percent overall. Net exports pulled down GDP growth by 0.9 percentage points.
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We expect overall economic growth to grow by one percent in real terms in 2019. Calendar adjustment this year will be negligible.