FRANKFURT (MNI) – The Ifo institute has slashed its 2013 GDP growth
forecast for Germany, noting that the outcome would depend on the
development of the Eurozone debt crisis.
In the fourth quarter of this year, GDP is forecast to fall 0.3%,
the institute said Thursday. “From today’s standpoint, Germany does not
look set to slip into an outright recession,” it added.
Ifo sees the economy growing 0.7% in 2013, in line with this year’s
pace but well below the 1.3% increase it expected six months ago.
“Over the course of 2013 it should subsequently increase by 1.4%,”
Ifo said. “However, due to the low starting level caused by the weak
winter, the average annual growth rate in GDP in 2013 will be just
0.7%.”
Ifo also revised down its employment forecast for next year and now
expects an average of 41.596 million, just 35,000 more than this year.
“There will be no significant growth in employment,” Ifo said. In June,
the institute had projected employment of 41.706 million next year.
Ifo foresees the jobless rate averaging 6.9% next year (revised up
from 6.6%) reflecting 2.957 million jobseekers after this year’s 6.8%
(6.7%).
“The number of unemployed will increase during the winter months,
but should gradually fall again over the course of the year ahead,” Ifo
said. “Due to the high starting level, however, there will be an annual
increase of 60,000 persons in 2013.”
The institute revised its projections for general government
finances and now expects a deficit of 0.1% of GDP for 2013 (revised from
balance), the same as this year (revised from -0.3%).
After averaging +2.0% this year, inflation is expected to slow to
1.6% in 2013 (revised from +2.0%).
Looking to the Eurozone, the Ifo institute projected GDP to
contract by 0.5% this year and 0.2% next year (revised from flat). Over
the course of next year, the economy should begin to expand again, it
said. “However, a full-fledged recovery is not yet in sight.”
— Frankfurt bureau: +49 69 720 142; email: frankfurt@mni-news.com —
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