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Private consumption supports economy: OECD expects less growth in Germany in 2020

2019-11-21T11:29:31.617Z

TIME ONLINE | News, backgrounds and debates



Paris (dpa) - The Organization for Economic Co-operation and Development (OECD) has predicted a further downturn for the German economy in the coming year.

Germany's economic output will grow by just 0.4 percent in 2020, the industrialized countries' organization said on Thursday in its annual economic forecast for all OECD countries.

For the current year, the OECD expects gross domestic product to increase by 0.6 percent. Ongoing trade disputes and uncertainty over Brexit worsened the outlook for the export-dependent German economy.

In 2021, however, the economy could be boosted again somewhat, it was said. The economists expect growth of 0.9 percent. Reasons for this are therefore a further increase in child benefits and tax relief through the abolition of the solidarity surcharge.

Private consumption and construction remained robust for the period, according to the OECD forecast. With a strong deterioration in the labor market is not to be expected because of the persistent lack of skilled workers and the flexibilization of working hours, the organization said.

Sustained tensions in world trade led to an economic downturn throughout the euro area, the report said. Germany and Italy are hardest hit because of their dependence on the manufacturing industry. Countries such as France or Spain, which relied more on domestic demand, have been better able to withstand the economic slowdown so far, according to the OECD.

Source: zeit

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