KfW Business Cycle Compass

KfW Business Cycle Compass August 2019

Weak manufacturing drives Germany into technical recession

The German economy shrank by 0.1% in the second quarter. In the short term, there is little hope for improvement. Manufacturers in particular are struggling; their business and export expectations remain pessimistic. KfW Research therefore now expects average real growth of only 0.4% for the year 2019 and 0.6% for 2020 (previous forecast: 0.8% and 1.8%). With exacerbated trade conflicts and the increasing likelihood of a hard Brexit, the external headwinds will continue for now and hamper domestic investment activity.

KfW Business Cycle Compass Germany August 2019 (PDF, 183 KB, non-accessible)

KfW Research forecasts the annual average growth rate of the German gross domestic product (GDP) in quarterly intervals. GDP is a key measure of economic performance. It measures the value of goods and services newly produced within the country in a specific period of time. Adjusted for price effects, the percentage change of GDP is the most important and most widely recognised indicator for real economic growth. The KfW Business Cycle Compass focuses on predicting real growth rates for the ongoing and for the coming year.

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KfW Business Cycle Compass