Macroeconomics

On this website, Deutsche Bank Research offers you analyses of the German and the global economy as well as developments in national and international financial markets. We provide macroeconomic and financial market forecasts and conduct research on structural and long-term issues.

May 8, 2020

Honey, we shrank our economy!

Region:

Germany

Focus Germany

Topic:

Economic and european policy, Macroeconomics, Sectors and resources

Analyst:

Barbara Boettcher, Eric Heymann, Jochen Moebert, Kevin Koerner, Marc Schattenberg, Sebastian Becker, Stefan Schneider

Weaker-than-expected March hard data and shocking April survey data point to a lower trough in economic activity than assumed so far. We now see Q2 GDP falling by 14% qoq, with the risks still skewed to the downside. In the 2009 recession, private consumption acted as a massive shock absorber. Given the lockdown, social distancing and a likely severe hit to income expectations, we expect private consumption to fall by 10% in 2020. The asynchronous global development of the COVID-19 pandemic and lasting impediments to global trade, will make the recovery, which began in May and will become more evident in H2, less dynamic than hoped for earlier. As a result, we expect German GDP to decline by 9% this year and to expand by about 4% in 2021. [more]

May 5, 2020

German property market outlook 2020

Region:

Germany

Germany Monitor

Topic:

Macroeconomics, Real estate

Analyst:

Jochen Moebert, Marc Schattenberg

The corona crisis is currently overshadowing all other aspects of the German property market. On the assumption of a strong recovery in the second half of the year structural issues will return to the foreground and the pandemic will slow down, but not bring an end to the German property cycle. In this report we look into both the negative effects of the crisis and fundamental factors and assess the outcome for the German house and office market. A flight to safety and the potential increased immigration could have a positive impact in the medium term. [more]

April 17, 2020

Quantifying the fiscal costs from corona virus

Region:

Germany

Focus Germany

Topic:

Economic and european policy, Macroeconomics

Analyst:

Sebastian Becker

The German government has responded quickly and decisively to the economic fallout from the corona pandemic. Altogether, Germany’s anti-crisis measures – consisting of extra spending, guarantees and loan/participation programs – sum up to an astronomic value of around EUR 1.9 tr (well above 50% of GDP in 2019). This gives the government huge scope to fight the pandemic and economic crisis. In this note we try to quantify Germany’s fiscal costs from the corona crisis. [more]

April 16, 2020

Cautious lifting of corona restrictions with regional differences to remain

Region:

Germany

Focus Germany

Topic:

Economic and european policy, Macroeconomics

Analyst:

Barbara Boettcher, Eric Heymann, Stefan Schneider

Merkel’s cabinet in consultation with the PMs of the 16 federal states agreed to partially lift containment measures but curbing health risks clearly dominated economic risks of a longer shutdown. The decisions taken will be reviewed on a bi-weekly basis with the next meeting of political leaders on April 30. A European coordination of (national) exit strategies is important for Germany given its strong economic interlinkages with other member states. [more]

April 14, 2020

Are we on our way to state capitalism?

Region:

Germany

Talking Point

Topic:

Economic and european policy, Macroeconomics

Analyst:

Stefan Schneider

It’s quite grotesque indeed: while Germany is admired by other countries for its handling of the corona crisis, we are once again – in typical German style – chewing over everything real or imagined that doesn’t work or didn’t work even before the crisis. [more]

March 19, 2020

Government support for German companies in the corona crisis

Region:

Germany

Focus Germany

Topic:

Banking and financial markets, Macroeconomics

Analyst:

Jan Schildbach, Sebastian Becker

Fighting the corona crisis: Whatever it takes. The government’s support measures so far include greater access for firms to short-time allowance, tax moratorium and the potential provision of state guarantees of up to EUR 460 bn. We expect the government to come up with additional fiscal stimulus measures soon. The budget balance could post a deficit of 3.5% of GDP in 2020/21. (Also in this issue: KfW programmes to support corporate Germany – A primer. Corporate lending in a corona recession: Development banks as an anchor of stability?) [more]

March 18, 2020

Under corona siege - Update

Region:

Germany

Focus Germany

Topic:

Banking and financial markets, Economic and european policy, Macroeconomics, Sectors and resources

Analyst:

Barbara Boettcher, Eric Heymann, Jan Schildbach, Kevin Koerner, Marc Schattenberg, Sebastian Becker, Stefan Schneider

Corona recession – depth probably close to 2009 slump. Within days lock-down measures and (temporary) factory closures have reached a level that suggests a far bigger H1 contraction than previously thought. In our new baseline scenario we expect GDP to decline between 4% and 5% in 2020, notwithstanding a recovery in H2, as – in contrast to 2009 – the service sector will be hard hit, too. (Also in this issue: the German government's support measures, labour market, industrial recession, auto industry, corporate lending, the view from Berlin) [more]

February 28, 2020

COVID-19: How policy can buffer the virus shock

Region:

Topic:

Analyst:

In addition to absorbing a virus shock through the China export demand and supply chain channels, Europe now has to absorb a domestic outbreak. Voluntary steps to prevent the spread of the coronavirus (“social distancing”) as well as official containment measures are likely to disrupt economic activity. We expect disruption beyond northern Italy, an area which accounts for about 5% of euro area GDP. A temporary economic shock similar in scale to Hong Kong’s when SARS struck in 2003 would only need to occur in 10% of the euro area for area-wide GDP to stagnate in H1 and take the zone to the verge of technical recession. It is a highly fluid situation, but this might be a best case outcome. [more]

February 27, 2020

Argentina - A narrow path to „sustainability“

Region:

International

Thematic Research

Topic:

Macroeconomics

Analyst:

Drausio Giacomelli, Felipe Labbe, Hongtao Jiang

We revisit the debt situation in Argentina and update our assessment on debt sustainability by projecting both debt stocks and FX debt repayment capacity. Argentina’s debt problem originates from fiscal dominance and lack of nominal anchor. The problem will likely persist in the future unless Argentina implements structural reforms. Current macroeconomic conditions are significantly more challenging than in the early 2000s in terms of potential growth, inflation, and external conditions. [more]

February 25, 2020

Longer-term benefits of the Phase One deal

Region:

Topic:

Analyst:

The Phase One trade agreement between the US and China is more than a trade war truce and USD200 bn of purchases. It covers a broad range of topics from intellectual property (IP) protection to opening up China's market. Our broad assessment is successful implementation of this trade deal could bring sizable long-term benefits to China and the world economy. [more]

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