Economy

German GDP Growth Revised Down to 1.6%

Douglas A. McIntyre

Published: April 14, 2016 6:43 am

Last Updated: January 13, 2020 10:47 am

Germany is the engine of the European Union’s economy, by far its largest country by gross domestic product (GDP). Its economic engine has sputtered, according to widely regarded Germany-based research firm Ifo Institute, which cut its 2016 GDP forecast for the country to 1.6%. Ifo’s previous forecast was 1.8%.

The blame fell almost completely on the global economy and Germany is a major exporter, particularly to other EU nations. Ifo’s Timo Wollmershäuser, Interim Director of the Ifo Center for Business Cycle Analysis and Surveys, remarked on the new forecast:

The revision was entirely due to the marked cooldown in the world economy at the end of 2015. Germany’s domestic economy is even stronger today than it was last autumn.

The worry adds to the one that the Chinese economy may slow to only a 6% GDP improvement this year, which is extreme poor compared to its historic trend.

The International Monetary Fund lists Germany as the world’s fourth largest economy, with GDP of $3.4 trillion. That puts it well ahead of the next EU nation, France, which has a GDP of $2.4 billion.

If the world’s economy is broken into its four largest segments — the European Union, the United States, China and Japan — the only one that appears to be outperforming expectations is America, which is not enough to buttress the other three. The revision of Germany’s outlook is another chink in the global economy.