German think tank says receding manufacturing sector damaging growth
A German think tank today said the countrys export-oriented manufacturing sector, which is at the heart of its economy, “is in recession”.
Read more: Germany sells 10-year bond at lowest ever yield
The Ifo Institute reaffirmed its prediction that Europes biggest economy will expand by just 0.6 per cent in 2019, saying growth will be driven by consumer spending and construction.
It became the latest forecaster to issue a gloomy account of Germanys struggling economy.
Late last month the Organisation for Economic Co-operation and Development (OECD) said Germanys economy would grow by just 0.7 per cent in 2019.
New car emissions tests have been blamed for hurting output in the countrys key automobile sector while low water in the river Rhine is said to have damaged production at chemicals factories.
The respected Ifo Institute said the German economy will be driven by private consumer spending over the next few years. Ifo predicted it will increase by 1.4 percent in 2019 and by 1.3 percent in 2020.
“However, there are increasing signs that industrial weakness is gradually spreading to the domestic economy via the labour market and deep value chains,” said Timo Wollmershaeuser, head of Ifos economic forecasts.
Its prediction of a slightly weaker domestic economy has cauRead More – Source
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