Evans Chamberlain Asset Management - IMF Reduces Germany's Growth Forecast for 2018

TAIPEI CITY, Taiwan, August 16, 2018 (Newswire.com) - The International Monetary Fund (IMF) recently reduced its forecast for German GDP growth for this year to 2.2 percent citing rising protectionism and the possibility of a hard Brexit as the biggest threat to Europe’s largest economy. The IMF had previously predicted that Germany’s GDP expansion would reach 2.5 percent in 2018. Evans Chamberlain Asset Management analysts reported that the IMF increased its growth forecast for next year from 2.0 percent to 2.1 percent.

Evans Chamberlain Asset Management analysts say short-term risks to the German economy are substantial and include a rise in worldwide trade protectionism and the threat of a hard Brexit which could cause an increase in financial stress and affect German investment interests and exports.

United States President Donald Trump recently made the decision to impose import tariffs on a range of goods imported from China and the European Union, a move which could spark a full-blown global trade war and tensions persist between the UK and Germany over the specifics of Britain’s looming departure from the European Union.

Evans Chamberlain Asset Management analysts say that although the International Monetary Fund was pleased with German Chancellor Angela Merkel’s government’s plan to increase public investments and bolster long-term expansion, it still believes Germany could and should do more in this area.

In light of Germany’s rapidly aging population, IMF policymakers suggest wider expansion of public investment in areas of education and infrastructure as well as laying out greater incentives for private investments.

Evans Chamberlain Asset Management analysts say these measures would boost German productivity growth, increase long-term productivity and bring down Germany’s large trade surplus.

Source: Evans Chamberlain Asset Management