Latest news with #MonikaSchnitzer
CNBC
27-05-2025
- Business
- CNBC
The Merz government must promote investment, says German Council of Economic Experts
Monika Schnitzer, chair of the German Council of Economic Experts, discusses the German economy and the GCEE's spring report.
Fibre2Fashion
23-05-2025
- Business
- Fibre2Fashion
German economy to see nil growth in 2025, 1% growth in 2026: GCEE
The German economy, which is still in a phase of 'pronounced weakness', is expected to stagnate this year and grow by only 1 per cent in 2026, according to the German Council of Economic Experts, an independent academic body that advises on economic policy issues. Bureaucratic requirements and long approval procedures are slowing down overall economic growth. Germany's economy, in 'pronounced weakness', is expected to stagnate this year and grow by 1 per cent in 2026, the German Council of Economic Experts said. Bureaucratic needs and long approval procedures are slowing down growth. Average CPI inflation is likely to be 2.1 per cent in 2025 and fall to 2 per cent in 2026. US trade policy places an additional burden on the already weak German exports. If funds from the recently-announced fiscal package are spent on additional investment, this will modernise the country's infrastructure and increase growth in the medium term, it noted. Debt-financing public consumption should be avoided, and institutional precautions should be taken to ensure investment-orientated use of the funds, it cautioned in its Spring Report 2025. Unnecessary bureaucracy should be reduced more consistently than in the past in order to relieve the burden on companies. 'In the near future, the German economy will be significantly influenced by two factors: US trade policy and the fiscal package,' explained GCEE chair Monika Schnitzer. 'US trade policy places an additional burden on the already weak German exports. With a sharp and unpredictable rise in tariffs, German exports are likely to decline even further,' she noted. Consumer price inflation is expected to be 2.1 per cent on an average in 2025 and fall slightly to 2 per cent in 2026. 'Although markets anticipate interest rate cuts, the inflation outlook remains highly uncertain. For instance, it is unclear whether ongoing trade conflicts will fuel or dampen inflation. In addition, expansionary fiscal policies in Germany could raise inflation expectations, potentially prompting the ECB to favour a more restrictive monetary policy stance,' explained Veronika Grimm, council member . Fibre2Fashion News Desk (DS)
Kuwait Times
22-05-2025
- Business
- Kuwait Times
German expert council forecasts stagnation for economy in 2025
BERLIN: Members of the German Council of Economic Experts (left to right) Martin Werding, Achim Truger, chairwoman Monika Schnitzer, Ulrike Malmendier and Veronika Grimm poses with the report after a press conference in Berlin, on May 21, 2025. -- AFP BERLIN: The German Council of Economic Experts cut its forecast for Europe's largest economy on Wednesday, now expecting it to stagnate this year during a 'pronounced phase of weakness'. The academic body that advises the German government on economic policy had predicted the economy would grow 0.4 percent this year in previous forecasts published in November. Germany has been the only member of the G7 advanced economies that failed to grow for the last two years, burdened by fiscal restraints and an industrial downturn. 'The unfavorable effects of the overall economic weakness phase on the labor market continue,' Veronika Grimm, a member of the council, told a press conference in Berlin. The number of unemployed people in Germany is approaching the 3 million mark for the first time over the last 10 years. The tariffs announced by US President Donald Trump are expected to deal a major blow to its export-oriented economy. 'The German economy will be significantly influenced by two factors in the near future: US tariff policy and the fiscal package,' Monika Schnitzer, chairwoman of the council, said in a council statement on its forecast. The US was Germany's biggest trading partner in 2024, with two-way goods trade totaling 253 billion euros ($284 billion). 'Even if it does indeed happen that tariffs are reduced, that Trump succeeds with his 'deal economy' and countries simply trade and the tariffs are not that high, he has managed to introduce enormous uncertainty into the system,' Ulrike Malmendier, another council member, told the press conference. On the bright side, Germany approved in March a fiscal plan that includes a 500-billion-euro special fund for infrastructure investments, and largely removes defense investment from rules that cap borrowing. The fiscal package offers opportunities to return to a growth path, economists say. 'The effects of the financial package won't be noticed immediately and that's why this growth boost will only occur next year - it takes time,' Schnitzer told reporters. Starting in 2026, the new funds should spur investment in construction and equipment as well as government spending, the council said, forecasting 1.0 percent growth next year. — Reuters
RTÉ News
21-05-2025
- Business
- RTÉ News
German economic advisory panel forecasts stagnation this year
The German Council of Economic Experts has cut its economic forecast for the German economy, now expecting Europe's biggest economy to stagnate this year as it sees a "pronounced phase of weakness". The academic body that advises the German government on economic policy had predicted the economy to grow 0.4% this year in its previous forecasts published in November. Germany was the only member of the G7 advanced economies that failed to grow for the last two years, burdened by fiscal restraints and an industrial downturn. The tariffs announced by US President Donald Trump are expected to deal a major blow to its export-oriented economy. "The German economy will be significantly influenced by two factors in the near future - US tariff policy and the fiscal package," said Monika Schnitzer, chairwoman of the Council of Economic Experts. The US was Germany's biggest trading partner in 2024 with two-way goods trade totalling €253 billion. On the bright side, Germany approved in March a fiscal plan which includes a €500 billion special fund for infrastructure investments, and largely removes defence investment from rules that cap borrowing. The fiscal package offers opportunities to return to a growth path, economists say. Starting in 2026, the funds provided by the fiscal package will set positive impulses for investment in construction and equipment as well as government spending, the council said, forecasting 1% growth next year. Private consumption is also expected to grow somewhat stronger in 2026 compared to 2025, as disposable incomes will increase more significantly in real terms, the council added.
Associated Press
21-05-2025
- Business
- Associated Press
Germany's economy will stagnate this year as tariffs cast a shadow, advisers say
BERLIN (AP) — Germany's economy will stagnate this year as the country faces headwinds from U.S. President Donald Trump's tariffs and trade threats, the government's panel of independent economic advisers said Wednesday. Germany has Europe's biggest economy, but hasn't seen significant economic growth in five years and the gross domestic product shrank in each of the last two years. The advisory panel, in its first forecast since new Chancellor Friedrich Merz's government took office earlier this month, predicted the economy will stagnate this year and grow by 1% in 2026. Its previous forecast, in November, was for 0.4% growth this year. The new outlook is in line with the forecast made a month ago by Germany's last government. Merz, who took office on May 6, has pledged to roll back bureaucracy, advance digitization, provide tax breaks for companies and promote more European trade agreements. 'Trump's tariff policy is increasing uncertainty and endangering economic growth worldwide,' said Monika Schnitzer, the head of the panel. But she said that a huge investment package put together by Merz's coalition 'offers opportunities for a modernization of infrastructure in Germany and a return to a higher path of growth,' meaning a better outlook for next year. Germany for years expanded exports and dominated world trade in engineered products such as industrial machinery and luxury cars. But it has suffered from increasing competition from Chinese companies, along with many other factors, and Trump's tariffs have added a further risk to German exports. Last year, the United States was Germany's biggest single trading partner for the first time since 2015, displacing China from the top spot as exports to the Asian power declined.
