Country Economic Forecasts - Germany

Country Economic Forecasts - Germany

The German economy avoided contraction in Q4 2020 thanks to the industrial rebound offsetting lockdown-related weakness in services. But this boost is set to fade as an easing of restrictions is unlikely in the near term, despite falling infection rates, given the latest risks from more infectious virus variants and slow vaccination progress. So GDP may fall moderately in Q1 this year. Overall, we now forecast 3.6% GDP growth in 2021, down from 3.8% seen last month, after last year’s 5.3% fall, with a return to pre-crisis GDP levels by end-2021.30195647515Industrial rebound is set to slow in early 2021, so lockdown-related services weakness will lead to moderate GDP contraction in Q100Industrial rebound is set to slow in early 2021, so lockdown-related services weakness will lead to moderate GDP contraction in Q1Industrial production ended 2021 on a solid note. It was flat in December but up 6.6% q/q in Q4, lifted by the rebound in global trade, dire restocking needs and a rise in car demand on back of purchase incentives. This strength offset the drag from services on the back of November’s lockdown-lite and its tightening in December. The latter also derailed the usual Christmas surge in retail sales, which plunged 9.6% m/m in December. But strong online and food sales still left them up 1.5% y/y.Easing manufacturing surveys and December’s 1.9% m/m fall in factory orders signal that the boost from industry is set to fade in early-2021. We are also sceptical that an early significant easing in containment measures to prop up services is likely. While lockdowns have brought infection numbers down to levels last seen in October, the government is concerned about the more infectious virus variants. So we have nudged down our Q1 GDP call to -0.7% q/q but still see strong growth by mid-year.2787651283280GDP fell 5.3% last year and is seen growing 3.6% in 2021 thanks to a strong rebound by mid-year00GDP fell 5.3% last year and is seen growing 3.6% in 2021 thanks to a strong rebound by mid-year Inflation surged to 1.0% in January from -0.3% in December. This was higher than forecast as the expected boost from the reversal of the VAT cut, a new carbon tax and rise in energy prices may have been amplified by delayed winter sales. The lift from the latter should fade in February so we stick with our view that inflation will average 1.8% in 2021 before slowing to 1.5% next year. Underlying price pressures will remain muted amid sluggish wage growth and subdued capacity utilisation.


​Germany: The following represents a general Table of Contents outline for the Country Economic Forecast.
The actual report may cover any or all of the topics listed below.
Highlights and Key Issues
four/five paragraphs of analysis covering the main economic and political issues contained in the subsequent Economic Overview
Forecast Table showing % changes for the country
with 2 years of historical data and 4 years of forecast data for the following:
Domestic demand
Private consumption
Fixed investment
Stockbuilding (% of GDP)
Government consumption
Exports of goods and services
Imports of goods and services
Unemployment
Consumer prices
Current account balance (US$ and % of GDP)
Government budget (% of GDP)
Short-term interest rates (%)
Long-term interest rates (%)
Exchange rate (vs. US dollar)
Exchange rate (vs. euro)
Economic Overview
two pages of events-driven analysis highlighting the most recent economic activity and, where relevant, political developments of the country, detailing significant changes to Oxford Economics' forecasts
Charts and Tables
covering a full range of economic developments relevant to the time period covered.
These could include such topics as:
Contributions to GDP growth
Monthly industrial output
Business and consumer confidence
Unemployment rate
Retail sales
Prices and earnings
Consumption and investment
Government balance and debt
GDP and industrial production
Monetary policy and bond yields
Background Information on the country
One or two pages of text covering the main historical political and economic factors that determine the country's current position
Key Facts on the country
Map of the country
Key political facts
Long-term economic and social development
changes since 1980
Structure of GDP by output
latest year
Long-term sovereign credit ratings and outlook
Corruption perceptions index- latest year
Structural economic indicators
changes since 1990
Destination of goods' exports -prior years
latest year
Composition of goods & services exports
latest year ​

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