4 October 2018

Autumn forecast: despite mounting risks economy will remain stable

  • Exit from ECB’s negative interest policy overdue
  • Investment remains weak point of German economy

The Association of German Banks has unveiled its latest economic forecast. “Should trade conflicts continue to escalate and with the current difficulties in some emerging countries, there is an increasing danger of the global economy entering a minefield,” said Chief Executive Christian Ossig. “We nevertheless assume that the risks will remain manageable.” The world economy was therefore likely to remain on track in the coming year, he continued.

“Last year the economy in the eurozone and in Germany surged. Unfortunately, this phase was only short-lived. But the slackening of economic momentum since then should not be seen as the beginning of the end of the upswing. Robust domestic demand driven by positive developments in the labour market and increases in real wages will keep the upswing going – though with growth at 1.8 per cent next year ‘only’ at a moderate rate,” Ossig explained.

Inflation in the eurozone would stabilise at around 1.75 per cent in 2019. “That’s entirely in line with the ECB’s medium-term inflation target,” said Ossig. There was no longer any justification for negative interest rates. So Association of German Banks calls on the ECB to plan an exit from its negative interest policy. 

The weak point of the German economy remains investment in machinery and equipment, according to Ossig. “Given the situation of corporate earnings, capacity utilisation, continuing world economic growth and interest rates which are still very low, investments ought to have grown much more. The chief economists of the private banks in Germany fear that the growth in investment will once again slow significantly next year.” Ossig therefore called for economic policy to focus first and foremost on the investment conditions in Germany. “We need a friendlier investment climate overall and a solid boost in public investment, especially in the areas of network expansion and education. So the recent proposal of the German Economic Minister to launch a ‘growth package for innovation, relief and less bureaucracy’ deserves every support.”

Forecast summary


  September 2018 Umfrage Feb. 2018
  2018 2019 2018 2019
 Gross domestic product 1) 1,9 1,8 2,4 1,9
 Household consumer spending 1) 1,5 1,5 1,9 1,7
 Public expenditure 1) 1,1 1,8 1,4 1,6
 Investment in machinery and equipment 1) 4,5 3,1 5,5 3,6
 Construction investment 1) 3,1 3,0 2,7 3,1
 Exports 1) 3,1 3,6 4,8 4,2
 Imports 1) 3,6 4,4 5,2 4,8
 Development of consumer prices 2) 1,8 1,8 1,8 1,7
 Number of unemployed (in millions) 2,340 2,260 2,375 2,310


  September 2018 Umfrage Feb. 2018
  2018 2019 2018 2019
 Eurozone: gross domestic product 1) 2,0 1,8 2,3 1,9
 Eurozone: consumer prices (HCPI) 2) 1,7 1,7 1,6 1,6

1) Real change in % on previous year.
2) Annual average change in % on previous year

The Association of German Banks’ economic forecast is prepared twice a year. It is based on a survey of the 13 chief economists of private banks on the association’s Economic and Monetary Policy Committee.

Stefan Schneider, Chief German Economist, Head of Strategic Research, Deutsche Bank AG, Committee Chair
Burkhard Allgeier, Chief Economist & Chief Investment Officer, Hauck & Aufhäuser Privatbankiers AG
Marco Bargel, Chief Economist, Postbank, DB Privat- und Firmenkundenbank AG
Klaus Bauknecht, Chief Economist, IKB Deutsche Industriebank AG
Jan Bottermann, Chief Economist, NATIONAL-BANK AG
Carsten Brzeski, Chief Economist, ING-DiBa AG
Felix Hüfner, Chief German Economist, UBS Europe SE
Carsten Klude, Chief Economist, M.M. Warburg & CO KGaA
Jörg Krämer, Chief Economist, Commerzbank AG
Andreas Rees, Chief German Economist, UniCredit Bank AG
Stefan Schilbe, Chief Economist, HSBC Trinkaus & Burkhardt AG
Holger Schmieding, Chief Economist, Joh. Berenberg, Gossler & Co. KG
Dirk Schumacher, Senior European Economist and Managing Director, Natixis Zweigniederlassung Deutschland.

Association of German Banks management:
Christian Ossig, Chief Executive, Association of German Banks
Markus Becker-Melching, Member of the Management Board, Office of the Chief Executives, Political Affairs, International Relations, Economics.


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