ifo Economic Forecast Winter 2018: Germany’s Economy Cools Down

On 13 December 2018, the ifo Institute presented its economic forecast for 2018, 2019 and 2020. The boom is over and Germany’s economy is beginning to cool down. On top of problems in the automotive industry, foreign sales markets, which are exposed to considerable economic risks, will also lose momentum. For this reason, ifo has scaled back its economic forecast for autumn 2018 significantly. It expects price-adjusted gross domestic product to increase by 1.5% in 2018, with growth slowing to 1.1% in 2019. Thanks to the higher number of working days, the increase in gross domestic product will accelerate to 1.6% in 2020. Adjusted for calendar effects, however, this rate will only be 1.3%. All in all, the over-utilisation of German economic capacities is likely to diminish, while the rise in employment will slow down.