Germany Business Forecast Report Q1 2010 : Market Research Report

Germany Business Forecast Report Q1 2010

Published by: Business Monitor International

Published: Oct. 30, 2009 - 46 Pages

Executive Summary: An L-shaped Recovery
Chapter 1: Political Outlook: SWOT Analysis; BMI Political Risk Ratings; Political Outlook; A Move To The Right For Economic Policy; September’s German elections have produced a victory for the centre-right, with an end to the ‘Grand Coalition’ in sight.
Table: Germany Political Overview
Chapter 2: Economic Outlook: SWOT Analysis; BMI Economic Risk Ratings; Economic Activity; An L-Shaped Recovery; We are expecting Germany to see an ‘L-shaped’ rather than a ‘V-shaped’ recovery. After a disastrous 2009, we forecast; economic expansion of 0.9%, but the German consumer is going to remain very subdued.
table: GDP CONTRIBUTION TO GROWTH
table: ECONOMIC ACTIVITY: Fiscal Policy; Merkel’s Cabinet: The Best Hope For Fiscal Sustainability; The incoming government offers the best hopes for an overhaul of the country’s fiscal situation and putting it on a; stronger footing going forward.
table: FISCAL POLICY (BASE SCENARIO): Monetary Policy; Monetary Tightening Set To Be Gradual; We do not expect the European Central Bank to hike interest rates until H210 at the earliest and even then the tightening; cycle will only be moderate.
table: EUROZONE MONETARY AND EXCHANGE RATE INDICATORS: Eurozone Economic Outlook; Eurozone Growth: Flattering To Decieve?; We are still forecasting an ‘L-shaped’ recovery in the eurozone, with a 0.4% growth figure for 2010 after a 4.0% contraction; in 2009.
Chapter 3: 10-Year Forecast: The German Economy To 2019; Underformance To Continue; Germany is set to slip from being the fourth to the seventh largest economy globally in nominal US$ terms over our 10-year; forecast period, as a result of slow real GDP growth and a resurgent US dollar.
table: GERMANY Long-Term Macroeconomic Forecasts
Chapter 4: Special Report: The World’s Fiscal Conundrum; Bleeding Red Ink Across The Globe
Table: WORLD GOVERNMENT EXPENDITURE INDICATORS
Table: WORLD GOVERNMENT REVENUE INDICATORS
Table: WORLD FISCAL BALANCE INDICATORS
Chapter 5: Business Environment: SWOT Analysis; BMI Business Environment Risk Ratings
Chapter 6: Key Sectors: Agribusiness; Executive Summary; Germany Agribusiness Report Q409 continues with many of the themes touched upon in previous reports, although; with the recession lessening its grip on the economy, fundamentals look set for marked improvements as we move; into 2010.; Autos; Executive Summary; BMI has revised down its German trade forecasts for 2009 in favour of a steep decline in exports owing to the overall; pessimism in the European markets.
table: GERMANY Cocoa Consumption & Trade
table: GERMANY Cocoa Consumption & Trade: Autos
table: German Autos Sector — Histo rical Data And Forecasts
Chapter 7: BMI Global Assumptions: Global Assumptions
TABLE: GLOBAL ASSUMPTIONS
TABLE: GLOBAL & REGIONAL REAL GDP GROWTH

Abstract

The economic recovery from 2010 onward will be ‘L-shaped’ rather than ‘V-shaped’, with real GDPset to expand by just 0.9% in 2010 and only bounce back more strongly in 2011, with a 2.0% printexpected by BMI. Fixed investment spending will have an important effect upon headline growthin 2010 and 2011 as the economy makes up ‘lost ground’ for the dearth of capital investment in2009 and net exports will start to work their magic again. However, the surge in export revenuesseen during the last boom is unlikely to be repeated any time soon.

T he September 27 Bundestag elections have called time on the ‘Grand Coalition’, which had all butbroken down by election day. A politically coherent centre-right administration between ChancellorAngela Merkel’s Christian Democratic Union and the liberal centre-right Free Democrats seems tobe on the cards. Some tax cuts, tighter public spending and less inter-coalition bickering is likely.

Nevertheless, the election was largely won by the collapse in the support for the centre-left SocialDemocrats, rather than any great enthusiasm for Merkel’s party. This could well prove difficult forcoalition partners once the government hits the mid-term blues.

Privatisation could be back on the agenda in Germany after a few years of absence. DeutscheBahn seems to be a key target, although it remains to be seen whether there will be an IPO or anasset sale. Nevertheless, there is little appetite to engage in any further major divestments, despitethe growing government debt pile and the large budget deficit.

We are forecasting a 4.0% contraction in the eurozone in 2009. This will be the first full-year contractionin the bloc’s history and reflects the broad-based nature of the decline across the eurozone.

The story remains varied across the states, with the declines having been driven variously by realestate bubbles collapsing (Ireland and Spain), over-exposure to capital good exports (Germanyin particular) as well as the impact of the CEE recession (Austria, Slovenia and Slovakia). Like inGermany, the eurozone recovery is likely to be ‘L-shaped’, with a 0.4% growth figure for 2010.

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Germany Business Forecast Report Q1 2010

Table of Contents

Abstract