Germany Business Forecast Report Q2 2010 : Market Research Report

Germany Business Forecast Report Q2 2010

Published by: Business Monitor International

Published: Feb. 5, 2010 - 58 Pages

Executive Summary: German Economy Finds Its Feet
Chapter 1: Political Outlook: Domestic Politics; Is The Political Balance Shifting In Germany?; The CDU is staying firmly on the centre ground of German politics, and is trying to avoid pressure from its political; partners to pull to the right.
Table: Politica l Overview: 10-Year Political Forecast; Tackling Demographic And Economic Challenges; The political challenges facing Germany over the coming decade are not so much centred on public policy as trying; to foster economic growth in east Germany, arresting (or managing) population decline and dealing with the potential; implications of further EU integration.
Chapter 2: Economic Outlook: Economic Activity; Rebounding From The Worst Post-1945 Recession; The German economy posted its worst post-World War II real GDP growth outturn in 2009, seeing a contraction; of 5.0%.
Table: ECONOMIC ACTIVITY: Debt And Fiscal Policy; Could Germany’s AAA Rating Be At Risk?; Germany’s AAA credit rating looks to be secure over the forecast period, although risks do exist, especially as; Germany has broken the 60.0% of GDP Maastricht debt limit.; tab le: DEBT INDICATORS; Eurozone Monetary Policy; Internal Divides Pose Tough Questions; The European Central Bank will maintain easy monetary policy through the end of 2010, as the economic recovery; is unlikely to be strong enough to warrant inflation-fighting measures at this stage
Chapter 3: 10-Year Forecast: The German Economy To 2019; Underperformance To Continue; Germany is set to slip from being the fourth to the sixth 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.; tab le: Long -Term Macroeconomic Forecasts
Chapter 4: Special Report: Political Risk In The Next Decade; What To Expect In 2010-2019
Table: Countries Facing Major Leadership Succession In 2010-2019
Table: Countries At Risk Of Major Politica l Upheaval
Table: Countries At Risk Of Interstate Conflict Or Heightened Bilatera l Tension
Table: Countries Facing Secessionist Or Autonomy Movements , Insurgencies , Or Civil Wars
Table: Pivota l States
Chapter 5: Key Sectors: Petrochemicals
Table: Germany’s Petroc hemica ls Sector, 2006-2014 (‘000 tpa , unless ot herwise stated ).45: Insurance
Table: Gro wth Drivers, 2006-2014
Chapter 6: BMI Global Assumptions: Global Outlook; 2010 Looking Rosier
TABLE: GLOBAL AND REGIONAL REAL GDP GROWTH
TABLE: developed market exchange rates
Table: Emerging Market Exchange Rates
TABLE: GLOBAL ASSUMPTIONS
TABLE: DEVELOPED STATES
TABLE: EMERGING MARKETS

Abstract

Germany’s economy is set to bounce back from the 5.0% contraction in real GDP witnessed in2009 to see growth of 1.7% in 2010 according to BMI’s latest forecasts. We expect to see a morebalanced growth profile over the forecast period, with a stronger consumer and a weaker exportsector. Support for this improved growth profile will come from a broadly stable political sceneover the next three years as well as a world-class business environment. Over the longer term,however, we remain concerned over structural weaknesses in the political system, and risks tothe country’s skills base posed by a potential demographic timebomb.

The CDU is staying firmly on the centre ground of German politics, and is trying to avoid pressurefrom its political partners to pull to the right. We expect Chancellor Angela Merkel to maintain acentrist approach, though concessions will have to be made, potentially including tax cuts in 2010-2011. The political challenges facing Germany over the coming decade, however, are not so muchcentred around public policy, as trying to foster economic growth in east Germany, arresting (ormanaging) population decline and dealing with the potential implications of further EU integration.Overall, the political risk profile in Germany remains amongst the best in the world.

The German economy posted its worst post-World War II real GDP growth outturn in 2009, seeinga contraction of 5.0%. We expect real GDP growth to return this year, with a 1.7% expansion nowbeing forecast by BMI. Germany is set to slip from being the fourth to the sixth-largest economyglobally in nominal US$ terms over our 10-year forecast period, as a result of slow real GDPgrowth and a resurgent US dollar. Growth will be constrained by increasing global competition inGermany’s key capital export industries, the reticence of German consumers to spend money,and past governments shying away from market-friendly reforms.

Germany’s business environment remains strong by international standards. Communication linksare good, the workforce well educated and multilingual and the regulatory environment generallysupportive of the commercial and industrial sectors. However, the company tax regime, as wellas employment law, continue to be major impediments to Germany raising the pace of economicgrowth. Skills shortages could emerge in future years as the population ages, unless Germanybecomes increasingly open to importing labour from elsewhere in the EU and beyond.

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Germany Business Forecast Report Q2 2010

Table of Contents

Abstract