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Germany

Germany has recovered well from the global financial and euro crisis. To make sure that the future challenges are successfully addressed, a balance between sustainable growth and social participation are essential. To achieve these objectives further reforms are needed as well as an improvement of the macroeconomic framework. Policymakers, businesspeople and the public must face up to their responsibilities. DB Research analyses the economic and political conflicting ideas and incorporates possible solutions into economic and political outlooks. These are based on national sector research, global business cycle and financial forecasts as well as the assessment of international political developments.

365 Documents
September 27, 2022
Region:
German economy: Out in the cold. The real income and confidence shock resulting from the NS1 shutoff as well as the negative real wealth shock of some EUR 1.5 tn will likely send private consumption into a tailspin in 2023. Surging uncertainty and the energy shock causing a slump in competitiveness and profits will put a brake on corporate investment spending, in our opinion. The three fiscal packages and a probable additional one will likely not prevent a GDP slump. Together with a weaker global outlook, we expect the loss in final domestic demand to result in a GDP drop of 3% to 4% in 2023, after an increase of around 1% in 2022. [more]
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September 14, 2022
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Analyst:
On July 21, the ECB announced that it would raise the interest rate on the deposit facility from -0.5% to 0%, effective July 27. By the end of that very month, banks in Germany had reduced their stock of banknotes and coins by a record EUR 11 billion. There is much to suggest that they will continue to reduce their non-interest-bearing cash holdings, as the ECB interest rate will rise further to 0.75% in mid-September. [more]
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July 21, 2022
Region:
Germany's current account is in flux. Currently, the "terms of trade" shock is reducing the surplus in the goods balance. But structural factors such as the reduced importance of industry and demographics also point to lower surpluses. In addition, we expect a further narrowing of the deficits in the services balance. The surpluses from the primary and secondary balance, on the other hand, are likely to increase further. In total, the current account ratio will fall sharply in 2022, especially measured in terms of GDP, and will also tend to be significantly lower than in the past thereafter. Accordingly, criticism of Germany's surpluses is likely to become increasingly muted. [more]
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July 14, 2022
Region:
Moving into recession. A likely further decline in Russian gas supply after the maintenance of NS1 will necessitate additional savings. While we do not expect a full rationing, we believe the economic consequences will together with a US recession and other headwinds push Germany into a recession in H2 2022. Given that prospects for Russian gas deliveries have darkened since February, this energy shock will not hit Germany by surprise or unprepared. Hence, we expect a modest but rather drawn-out GDP decline, as the economy gradually adjusts. After a 1 ¼% expansion in 2022, German GDP will shrink by around 1% in 2023, largely because consumers will not be able to offset the real income loss by further dissaving. In a “tap remains turned off” scenario, we expect a rationing of gas leading to a GDP slump between 5% and 6% in 2023. [more]
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July 6, 2022
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Analyst:
From 2035, only climate-neutral passenger cars will be allowed to be registered in the EU. In principle, the course is being set in the direction of battery-electric mobility. However, the option of using e-fuels is not completely off the table. The market shares of electric cars in total new registrations currently vary widely within the EU. Southern and Eastern European countries are lagging behind. To increase the acceptance of e-mobility, the expansion of the charging infrastructure must be widely accelerated. This is a major challenge that also requires the support of the state. The trend towards electric mobility has already triggered a noticeable structural change in Germany as an automotive location. The net impact of this structural change on value creation and employment in Germany is likely to be negative. [more]
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June 22, 2022
Region:
After two years in the virtual world Deutsche Bank Research returned to Paris to host another highly successful Global Consumer Conference. Around 700 people and including 90 companies, attended over the three days of the conference. Company and investor engagement was extremely high with more than 7,000 meeting requests. Tom Sykes, Head of European Consumer Staples and Stephen Powers, Head of US Consumer Staples, co-hosts of the event, said: “Feedback has been very positive from the companies and investment communities and we look forward to seeing everybody again in Paris in 2023 for our celebratory 20th year!” [more]
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May 20, 2022
Region:
In this edition of Focus Germany we look at the cyclical, short-term challenges brought about by the Ukraine war with regard to growth, inflation and public finances. We also analyse the more structural longer-term challenges, such as reducing the countries’ energy dependence on Russia and the governing coalition’s efforts to integrate new priorities precipitated by the historic watershed into its already very ambitious agenda. [more]
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