Economic Buzz: German Ifo Institute Trims Growth Projections Citing Rise In Global Economic Risks

Germanys economy is projected to expand 1.8 percent each this year and next, according to the Ifo Institute. The think tank had forecast 2.6 percent growth for 2018 and 2.1 percent in 2019. The agency said economic capacity shortages will persist over the forecasting period, accompanied by a consolidation in both wage and price increases. Meanwhile, external demand will contribute less to the upturn since the world economy will be less dynamic, Ifo said. Private consumption and construction investment will increasingly drive economy. On the fiscal front, Ifo said the policy will be slightly expansionary in both years of the forecast. Fiscal stimuli will total around EUR 18 billion in 2019, or 0.5 percent of GDP.