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Barbara Boettcher

More documents written by Barbara Boettcher

61 (49-60)
December 16, 2015
Region:
49
The German economy was extremely stable over the course of 2015, although the volatile newsflow that ranged from the oil price shock, material euro exchange rate depreciation, “Dieselgate” right through to the refugee crisis could make one think otherwise. Driven by a 15-year high in private consumption growth economic output rose by more than 1 ½% in 2015, as already achieved in 2014. Economic growth is set to accelerate to nearly 2% in 2016, following a pretty stable trend over the course of the year. Private consumption should remain the most important growth driver. Public consumption will remain expansionary given the continued influx of refugees and resulting public spending. If refugees can be successfully integrated into the labour market, the refugee crisis will provide Germany's ageing society with a medium-term opportunity. [more]
November 5, 2015
Region:
50
Since the last Focus Germany, some disappointing economic data have been published that fuelled the speculations around a slowing German economy. We do not believe that this requires revisions of our GDP forecast, though. Just like last year, the weakness of the industrial data is overstated by holiday effects. Nevertheless, there is a risk of an even lower foreign demand than stated by our already cautious estimates. This, however, is balanced by the upward risks for the domestic economy. Due to the migration dynamics over the summer months, we are reducing our budget forecasts for 2015 and 2016. Relative to gross domestic product we now expect surpluses of 0.3% and 0.0%, respectively (previously 0.7% and 0.5%). [more]
September 1, 2015
Region:
51
GDP growth accelerated slightly to +0.4% qoq in Q2 with disappointing details. The domestic economy was a drag due to the decline of investments and an inventory reduction. Consumption slowed. Net exports were the major growth engine. German exports benefitted from the weaker EUR and strong demand especially from the US. We cut our Q3 GDP growth forecast slightly to 0.4% qoq. Despite this downward revision, we modestly increase our 2015 GDP forecast to 1.7% due to the marginal upward revision of H1 numbers, and changes in the growth composition. Fundamentally our outlook remains unchanged. Domestic demand, esp. private consumption, is the primary growth driver and the external environment remains challenging. [more]
July 31, 2015
Region:
52
German model – has a consensus economy reached its limit? German output growth poised to outstrip potential again in current year. Despite new government spending programmes there should be continued budget surpluses for the time being. Given the strengths of its institutional framework Germany has so far largely been able to avoid the possibility of distributional conflicts feeding through in the shape of higher government deficits and/or rising inflation. Demographic developments, not least, will probably put this resilience to the test. However, a new reform thrust is needed in view of decreasing locational advantages. It remains to be seen whether society will carry through with an update of the Agenda 2010 reforms. [more]
April 30, 2015
Region:
53
The financial situation of German households continued to improve markedly in 2014. The good income situation enabled them to make new investments to the tune of EUR 160 bn. In addition, the valuation gains on existing financial assets came to EUR 53 bn. Overall, total gross household financial assets thus increased from EUR 5 tr to EUR 5.2 tr (180% of GDP). Nothing has fundamentally changed with regard to the minimal risk appetite of German investors; risk-bearing investments still constitute less than 25% of financial assets. However, their share of new investments climbed to 11%. Furthermore, in 2014 EUR 20.5 bn of new debt was taken on. Both developments have probably been heavily influenced by the low-interest rate environment and are likely to continue in 2015 given the monetary policy outlook. [more]
March 30, 2015
Region:
54
The combination of the structural global trade slowdown, increased localization of production, demographic changes in Germany, the impact of recent economic policy decisions and further toughening of international competition are likely to be a considerable challenge for German exporters over the medium term. Thus, the domestic economy will play a bigger role again. Government policies can help ease the transition. German exporters could become even more globally active firms over the medium term. The specific reactions will vary by sector, though. The earnings generated by these firms around the globe are likely to be a blessing for an aging and more domestically driven economy in the decades ahead. [more]
March 2, 2015
Region:
55
The Q4 GDP details corroborate that the German economy ended 2014 on a high note (+0.7% qoq vs +0.1% in Q3) as private consumption received a substantial stimulus from the drop of the oil prices. We increase our 2015 GDP forecast to 2.0% from 1.4% previously. This is especially due to the much larger carry-over effect courtesy of the marked Q4 GDP growth. In addition, we raise our Q1 GDP forecast to 0.5% qoq as the renewed oil price drop will boost consumption again. Sentiment also improved further in January/February with ifo expectations and the composite PMI pointing to 0.5% and 0.4% growth, respectively. [more]
February 2, 2015
Region:
56
Late last year we raised our GDP forecast for Germany from 0.8% to 1.0% on account of the steep downside correction on expectations for oil prices. We now expect German GDP growth to hit 1.4% in 2015. Reasons: Growth slightly exceeded expectations in Q4 2014; the oil price forecast for 2015 has been lowered again; and the euro has fallen more sharply against the US dollar than anticipated. Given this good outlook for the economy Germany's public budgets are likely to show a slight surplus again in 2015. Moreover, the current account surplus is set to jump to 8% of GDP. This suggests there will be further calls for Germany to use its fiscal room for manoeuvre to pursue a public investment programme. Also, international criticism of German economic policy is likely to grow louder. Further topics in this issue: German industrial output forecast upped to 1.5%, 10 "golden" rules for ifo, PMI and Co., The view from Berlin. [more]
September 15, 2014
Region:
57
The future of the British EU membership has become one of the most pressing concerns for the EU. The EU-British relationship has always been one of special character but a number of recent developments have led to a ‘Brexit’ gaining momentum. Only the UK itself will be able to rationalise the domestic debate on EU membership. Economically, Britain and the EU are inextricably linked. Realistic estimates predict losses in the range of 1 to 3% of British GDP in case of a Brexit. Likewise, the Single Market would shrink by 15%. [more]
December 16, 2013
Region:
58
The approval of the coalition negotiations by the SPD’s membership has finally paved the way for a grand coalition. In our view, the agreement that is to be implemented over the coming years will take Germany in the wrong direction and will reduce trend growth in two broad ways: through the partial reversal of the successful Hartz reforms, as well as through increasing the fiscal sustainability gap through pension-system give-aways. Instead of making Germany a more competitive location for business and preparing its society for the demographic challenges ahead, the coalition is on course to implement policies that will be seen as errors in the years ahead. Increased federal spending on education, research and development is not accompanied by cuts in less useful policy interventions. European policy remains caught in a catch-22 between a tangled mass of over-complex regulation and the lack of willingness – not only in Germany – to rapidly pursue a political union. [more]
January 4, 2013
Region:
59
National elections will be held in Germany in the autumn of 2013. The election campaign will be shaped, above all, by personality issues, second by the stance towards the euro crisis, and third by some modest domestic social policy issues. Steinbrück receives good ratings for tax issues and leads over Merkel on social issues but Chancellor Merkel benefits from a solid economy and her stance on euro politics, reflected in her high popularity. Steinbrück and the Greens are outspoken on stricter banking regulation and a separation of investment banking from commercial banking. Merkel and her coalition have kept a low profile on this issue so far but the banks will remain under scrutiny. [more]
May 12, 2009
Region:
60
On May 1, 2004 the European Union was enlarged by ten new Member States. Their political and economic integration brought growth in trade, economic output and employment – but also in economic connectivity and mutual interdependence. As a result, the global economic and financial crisis has triggered serious economic slumps in some of the new EU members. It is now time to take initial stock of integration and turn to consideration of the outstanding issues. [more]
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