1. Research
  2. Products & Topics
  3. Topics
  4. Macroeconomics

Budgetary relief and debt dampening effect from the low interest rate environment: Not only a German phenomenon!

August 14, 2017
Region:
Yields on German government debt securities have fallen rapidly in the aftermath of the global financial and economic crisis and provided a considerable relief to the public sector budget. At the moment, federal government securities have negative yields for maturities up to 6 years and the yield on 10 year German Bunds stands at just roughly 0.4%. [more]

More documents about "Macroeconomics"

337 Documents
February 12, 2024
Region:
1
In early February, the German parliament approved the 2024 budget, ending a prolonged period of uncertainty and provisional budget management. But, torn between the intensifying consolidation requirements under the debt brake and the need to solve the economy's cyclical and structural challenges, the coalition government has already started to debate the upcoming 2025 budget. This fiscal policy debate appears unlikely to be settled anytime soon. In this note we discuss three possible scenarios for how the budget 2025 process might play out. [more]
January 23, 2024
Region:
3
Germany lags behind in digitalization. E-Government is a case in point. Historically, public projects are often based on complex coordination across many various entities. We think, switching from this traditional approach to a clear central governance is essential to implement a public cloud, to digitalize registers and offer digital services for citizens and businesses. Interestingly, Bavaria outperforms and seems to have a more central approach than other Länder. [more]
December 8, 2023
Region:
6
The external environment as well as monetary and fiscal policy should provide strong headwinds. Sentiment will likely be dragged lower by the increasingly evident structural problems. We anticipate a modest recession during the winter half to be followed by a gradual recovery from spring onwards. We expect the government to survive the internal quarrels with respect to the 2024 budget, following the constitutional court ruling. Debt brake reform is unlikely in the short run. A cross-party consensus for a Transformation Fund 2.0 might emerge before September regional elections. [more]
November 28, 2023
7
In our World Outlook for 2024, we outline how we’ve had a fairly consistent macro narrative over the past 2 3 years and we continue to see this as a classic policy led boom bust cycle that will culminate in a US recession. Ultimately, the impact of rapid rate hikes are yet to take effect in full, and QT is still continuing in the background. That will make early 2024 a challenging environment, and we expect a mild US recession in H1 2024. Meanwhile in the Euro Area, we think that a mild recession has already begun that will stretch into the start of 2024. [more]
October 13, 2023
Region:
9
A double-dip recession. Hard and soft data point to a GDP contraction of about 0.3% in Q3. Despite receding inflation,we expect that private consumption will only gradually come out of its rut, as consumer confidence has remained depressed. While the overall decline in GDP over the double-dip recession (Q4 22/Q1 23 and Q3 23) will probably be less than 1 percentage point, a renewed fall in GDP provides another blow to already downbeat German confidence. This negative feedback loop will likely weigh on the economy in 2024. In particular, structural supply bottlenecks look set to hamper growth opportunities and the energy transition is likely to slow potential growth in Germany towards 0.5% and keep the inflation rate above 2%. [more]
September 1, 2023
Region:
10
Back to school with a new edition of the "Germany: Economic Chartbook".
Given the deterioration of sentiment as well as other high-frequency data, and the current and looming global headwinds, we have lowered our 2023 and 2024 GDP forecasts. While inflation is moving in the right direction, leading labor market indicators point to first cracks, even though skilled workers are still in high demand. However, private consumption is weak, and the latest consumer sentiment surveys do not suggest an imminent upswing. We take a closer look at the development of wages and household finances. Higher interest rates and a low propensity to invest have slowed lending to companies. Finally, we also look at the fiscal budget, a German green trade surplus and the office market. With a more long-term perspective, we illustrate Germany's structural challenges. [more]
July 25, 2023
Region:
11
Germany’s growth is under pressure from renewed cyclical and structural headwinds. In this edition of Focus Germany we introduce our new Nowcast Model for German GDP, predicting that the German economy should have expanded in Q2, but that risks for activity in H2 are increasing. We take the summer break in Berlin as an opportunity for a midterm review of the traffic-light coalition’s work. In a historic flashback we revisit the challenges Germany was facing when the Economist called it the sick man of the euro and which policy measures transformed the country into an Economic superstar a decade later. We find interesting parallels to today’s situation. [more]
37.5.0