The German government surrenders to the evidence and reduces its forecast of economic growth for 2019 to 1% of GDP from the initially forecast 1.8%. Economy Minister Peter Altmaier has acknowledged that in 2018 the German economy narrowly avoided entering technical recession, already three tenths less than expected and explained that the reduction of economic growth targets is mainly explained by the impact of the international situation. In the press conference in which he presented the new forecasts, he specifically mentioned the possible consequences of a hard Brexit in relation to the departure of the United Kingdom from the European Union, and the "tensions" that may arise from March. "Of course the wind grows against, especially from the external economic environment, especially the Brexit, trade conflicts and the environment of international tax policy," he said, "the growth slowed compared to the previous year has to stimulate us to improve the framework that allows success and competitiveness ».
Altmaier has done his best to see the glass half full and has insisted that "the German economy is also in this year on a course of growth, the tenth consecutive year." "This is the longest period of growth since 1966 and at the same time a sign of the capacity of our social market economy", he has presumed, also referring to the buoyant situation of the labor market and emphasizing that he considers his development to be " positive". According to the German minister, the index of unemployment will be "predictably" at 4.9% Throughout 2019, the number of employed will rise to 45.2 million and the creation of 350,000 jobs will be registered. But this boom has its negative reading. What in any other economy is a cause for celebration, in Germany it generates problems for industry and services, sectors that fail to recruit as many workers as they need and that prevent GDP from maintaining a more lively pace precisely because, in many cases, of the lack of personnel.
Many experts see Germany at a time of transition between an industrial exporting economy and another import and services still to be finalized. Exports continued in 2018 at a lower rate than in previous years, 2.4% from 4.6% in 2017. The consumption climate, at least, will climb again in the month of February 2019, according to forecasts by the GfK market research institute. The index for the second month of the year will rise to 10.8 points, 0.3 points more than in January, driven by an increase in workers' income expectations and a drop in the propensity to save. In the middle of an unfavorable external context, imports increased 3.4% annually in 2018, compared to 4.8% in the previous year, and domestic consumption seems able to keep GDP in activity and the GfK estimates that private expenditures consumption will increase this year by 1.5%, the same rate of increase recorded last year.
But the fact is that the German economy has already been in 2018 growing at the slowest rate in the last five years, with GDP only slightly upwards in the fourth quarter. The Minister of Finance, Olaf Scholz, has started the year publicly recognizing that The "fat cows" era is over.