Ifo Economic Forecast 2014/2015: German Economy Gradually Regains Impetus

At its pre-Christmas press conference on 11 December 2014 the Ifo Institute presented its economic forecast for the years 2014 and 2015. After stagnating in the summer, the German economy is gradually regaining impetus. Real gross domestic product will increase by 1.5% respectively in 2014 and 2015. The recovery will primarily be driven by the domestic economy, which is benefiting from the drop in crude oil prices. Investments in new equipment will rise, while the ramping up of production capacities will make investments in expansion more urgent. Construction investment will also increase. Private consumption will expand at the same pace as increases in real income. Exports are expected to grow at an accelerated pace, thanks to an improvement in the world economy and in the price competitiveness of German exporters in other markets due to the depreciation of the euro against the US dollar, but imports will increase to an even greater extent thanks to the state of Germany’s domestic economy.