Frankfurt/M., 25 Januar Deutsche Konjunktur Stefan Kooths Forecasting Center, Office Berlin
GDP: Moderate expansion ahead 114 25=1 QoQ annualized growth rate Level (chain index) + 2.9 +.5 + 1.7 1 112 5 11 18-5 16-1 14 12-15 Forecast 2 1-2 I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV 27 28 29 21 211 213 Quarterly data, volumes, seasonally and working-day adjusted
Short run: Germany on the brink of a technical recession IfW Recession Probability Indicator 1 9 8 7 6 5 4 3 2 1 3 1972 1976 198 1984 1988 1992 1996 2 24 28
Medium run: The boom on hold for one year 26 Bn. Euro 5 25 4 24 3 23 2 1 22 21-1 2-2 19-3 4 18 17 Output gap GDP Potential output Forecast 1991 1993 1995 1997 1999 21 23 25 27 29 211 213 Annual data, volumes; output gap in percent of potential output -4-5
Manufacturing: Capacity utilization near normal levels 95 Bbk Order-Capacity-Index (rhs) Ifo capacity utilization 25 2 15 9 1 85 average 5 8-5 -1 75-15 -2 5 7-25 I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV 25 26 27 28 29 21 211 Quarterly data, seasonally adjusted
Robust domestic demand in the driver s seat 6 age points + 2.9 +.5 + 1.7 6 4 4 2 2-2 -2-4 -4 Stocks -6 External trade Gross fixed capital formation -6 Consumption Forecast 6-8 27 28 29 21 211 213-8 Annual data, volumes, growth contributions
Orders received by industry: Clear downward trend 14 25=1 Total From abroad 13 12 11 1 9 8 7 7 25 26 27 28 29 21 211 Monthly data, volumes, seasonally and working-day adjusted, 3-month moving average
Output in the production sector: Robust construction, weakening manufacturing 13 125 25=1 Manufacturing Construction 12 115 11 15 1 95 9 85 8 8 25 26 27 28 29 21 211 Monthly data, volumes, seasonally and working-day adjusted, 3-month moving average
Business climate reversal 116 25=1 111 16 11 96 91 86 Situation Expectations 81 9 76 25 26 27 28 29 21 211 Monthly data, seasonally adjusted
IfW-BVL Logistics Composite Indicator Index 18 16 14 12 1 normal level 8 6 4 Climate Situation Expectations 1 2 26-Q4 27-Q2 27-Q4 28-Q2 28-Q4 29-Q2 29-Q4 21-Q2 21-Q4 211-Q2 211-Q4
Logistics Activity in Industry and Trade Index 18 16 14 12 1 normal level 8 6 4 Climate Situation Expectations 11 2 26-Q4 27-Q2 27-Q4 28-Q2 28-Q4 29-Q2 29-Q4 21-Q2 21-Q4 211-Q2 211-Q4
Rescue packages for Euro member countries Threat for Germany s stability? of all respondents 7% 6% Logistics Service Providers Industry and Trade 5% 4% 3% 2% 1% 12 % yes no no answer Question: The German Bundestag along with the other Euro member countries has approved the extended scope for the EFSF rescue package. A further leveraging of the EFSF via access to ECB credit facilities is currently under discussion. Do you feel that the ongoing extension of the emergency measures 12 and the hereby incurred increasing risks are a threat to economic stability in Germany as the largest guarantor?
Business sentiment: Germany and rest of Euro Area drifting apart 2 Index 1-1 -2-3 -4 Germany Euro Area without Germany Euro Area 13-5 25 26 27 28 29 21 211 Monthly data, seasonally adjusted; Source: European Commission, IfW calculations
Financial stress due to European debt crisis IfW-Financial Stress Indicator for Germany 6 5 Index Great Recession 4 3 2 1 Recession 1982 Stock market crash 1987 EMS crisis Russia crisis Dotcom bubble European debt crisis -1-2 198 1985 199 1995 2 25 21 14
Exports and world production expectations 25 Index 2 2 15 1 1 5-1 -5-1 -2-15 -3-2 YoY export growth rate World production expecations (rhs) 15-25 1992 1993 1994 1995 1996 1997 1998 1999 2 21 22 23 24 25 26 27 28 29 21 211 Quarterly data, volumes expecations computed from 41 countries weighted by shares of German exports -4
World production and export expectations 1 Index 3 2 5 1-5 -1-2 -1 World industrial production (YoY growth rate) Export expectations (rhs) -3 16-15 1992 1993 1994 1995 1996 1997 1998 1999 2 21 22 23 24 25 26 27 28 29 21 211 Quarterly data, volumes computed from 41 countries weighted by shares of German exports -4
Manufacturing: Orders from abroad 4 Inflow (YoY growth rate) Index 2 3 Level (rhs) 1 2 1-1 -2-1 -3-2 -3-4 -4-5 -5-6 17-6 1992 1993 1994 1995 1996 1997 1998 1999 2 21 22 23 24 25 26 27 28 29 21 211 Quarterly data, volumes -7
Exports hit mainly by euro area recession 155 15 25=1 QoQ annualized growth rate Level (chain index) + 8.4 + 2.5 + 4.8 4 3 145 2 14 135 1 13 125-1 12-2 115 11 Forecast -3 18 15-4 I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV 27 28 29 21 211 213 Quarterly data, volumes, seasonally and working-day adjusted
Investment cycle laid off Fixed capital formation 25 1 2 5 15 1-5 5-1 Output gap (rhs) Share in Nominal GDP Growth (rhs) Forecast 19 1991 1993 1995 1997 1999 21 23 25 27 29 211 213 Annual data, volumes; output gap in percent of potential output -15
Company funding 1 9 8 Bond yields Spread Corporate Government 8 6 Lending standards Past three months Next three months 7 4 6 5 2 4 3 2-2 1 2 199 1995 2 25 21 Monthly data Corporate bonds: maturing within 3 years; Government bonds: maturing within 5 years -4 23 24 25 26 27 28 29 21 211 Quarterly data
M&E investment: Wait-and-see dampens cyclical momentum 14 135 25=1 + 8.4 + 3.2 + 8.4 3 2 13 1 125 12-1 115-2 11-3 15-4 1-5 21 95 9 QoQ annualized growth rate Level (chain index) Forecast I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV 27 28 29 21 211 213 Quarterly data, volumes, seasonally and working-day adjusted -6-7
Constructions driven by residential demand 115 25=1 + 5.5 -. + 2.1 4 113 3 111 19 2 17 1 15 13 11-1 99 22 97 95 QoQ annualized growth rate Level (chain index) Forecast I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV 27 28 29 21 211 213 Quarterly data, volumes, seasonally and working-day adjusted -2-3
Germany: Happy consumers Consumer Sentiment Index 15 Index 1 5-5 -1-15 -2-25 23-3 -35 Euro Area Euro Area without Germany Germany -4 24 25 26 27 28 29 21 211
Consumer spending reflects stable saving rate 18 25=1 + 1.4 +.9 + 1.1 6 17 4 16 2 15 14-2 13-4 12-6 11-8 24 1 QoQ annualized growth rate Level (chain index) Forecast -1 I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV 27 28 29 21 211 213 Quarterly data, volumes, seasonally and working-day adjusted
Disposable income of private households 211 213-1,2 % + 6,8 % + 3,9 % Net property income 31,5% Net monetary social benefits 24,8% + 1,9 % + 2,8 % + 3,3 % Disposable Income + 3,1 % + 2,6 % + 3,1 % + 2,8 % 25 Net wages and salaries 43,7% + 2,1 % + 3, % 21 shares (segments), current prices, change over previous year (boxes)
GDP and key components Volumes, change over previous year in percent 211 213 GDP 2.9.5 1.7 Private consumption 1.4.9 1.1 Public consumption 1.2 1. 1.6 M&E investment 8.4 3.2 8.4 Construction 5.5 -. 2.1 Exports 8.4 2.5 4.8 26 Imports 7.5 4.1 5.9
Public finance: Consolidation continues 1 2 9 8 7-2 6-4 5 4-6 3-8 2-1 27 1 Budget Balance Debt Forecast 1991 1993 1995 1997 1999 21 23 25 27 29 211 Annual data; In relation to nominal GDP in percent -12
but at not so ambitious speed Maximum structural federal deficits according to national debt brake (bn. Euro) Basis: Budgetary plan summer 21 Basis: Actual deficit 21 Basis: Actual deficit 21 and re-estimation of potential output 28
Employment at an all-time high 42, Mill. Persons QoQ change Level + 1.3 % 1 persons +.5 % +.5 % 3 25 41,5 2 41, 15 1 4,5 5 4, -5 39,5-1 Forecast 29 39, -15 I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV 27 28 29 21 211 213 Quarterly data, seasonally adjusted
total hours worked above pre-crisis levels 17 25=1 QoQ annualized growth rate Level + 1.7 +.1 +.4 1 16 8 15 6 14 4 13 2 12 11-2 1-4 99-6 98-8 Forecast 3 97-1 I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV 27 28 29 21 211 213 Quarterly data, seasonally adjusted
and labor productivity back on trend 11 25=1 + 1.2 +.4 + 1.3 6 19 4 18 2 17 16-2 15-4 14-6 13-8 12-1 31 11 1 QoQ annualized growth rate Level (chain index) Forecast I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV 27 28 29 21 211 213 Quarterly data, volumes, seasonally and working-day adjusted -12-14
Unemployment heading for 2.5 million 5, Mill. Persions QoQ change Level - 262 T 1 Persons - 112 T - 144 T 2 15 4,5 1 4, 5 3,5-5 -1 3, -15 2,5-2 32 2, -25 Forecast -3 I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV 27 28 29 21 211 213 Quarterly data, seasonally adjusted, (BA)
Moderate Inflation 116 25=1 QoQ annualized growth rate Level + 2.3 + 1.8 + 2. 5 114 4 112 3 11 2 18 1 16 14 12-1 Forecast 33 1-2 I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV 27 28 29 21 211 213 Quarterly data, volumes, seasonally and working-day adjusted
fueled more and more domestically 1 Unit labor cost Effective nominal wage rate CPI 8 6 4 2 34-2 Forecast 1992 1994 1996 1998 2 22 24 26 28 21 Annual data, change over previous year
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