Germany improves its growth forecast to 1.1% for this year

The Germany GDP, the country with the largest economy in Europe, will grow this year by 1.1%, which represents an improvement of half a percentage point with respect to the 0.6% expansion recorded in the previous year. It is a tenth more than originally planned by the Angela Merkel's Government, according to the new projections published this Wednesday by the Ministry of Economy. However, the growth of the German economy in 2020 would continue below the annual average of 1.3% for the last decade.

Peter Altmaier, German Economy Minister, said that "the outlook has improved." Altmaier said during the presentation of the new macroeconomic picture that "the economy will have a better evolution this year than expected last year." For the German politician, the main risks "continue to be related to the external business environment".

Despite this upward revision of official forecasts, Altmaier has stressed that this growth rate "Cannot satisfy the Government", since the current growth figures are still "too low."

The German Economy Minister sees it necessary to strengthen growth, competitiveness and productivity in order to carry out the necessary investments in the country. "To do this, we need to improve the tax framework and mainly a tax relief," said the minister , who has been in favor of keeping social security contributions below 40%.

New forecasts

The new forecasts of Berlin They point out that the good behavior of the labor market will continue, con a stable unemployment rate at 5%. Followed by an increase in the number of employed people towards 45.4 million in 2020. This will allow the growth of private income and boost the German domestic economy.

Germany grew 0.6% in 2019, experiencing a significant deceleration with respect to the 1.5% registered in 2018. This is the smallest expansion of the ‘European locomotive’ since 2013, when the German country grew only 0.4%.

However, despite the slowdown in growth recorded in 2019, Germany thus turned ten consecutive years of expansion. This is the longest growth phase of the country since 1966. Germany managed to avoid its recession by the minimum in the third quarter of 2019, when the German GDP grew 0.1%, after registering a 0.2% contraction in the second quarter.