German economy grew by 1.5 pct in 2018
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E-mail Xinhua, January 16, 2019
BERLIN, Jan. 15 (Xinhua) -- The growth of the German economy slowed down by 0.7 percentage points to 1.5 percent in 2018, the German Federal Statistical Office (Destatis) announced on Tuesday.
German economy has thus grown for the ninth consecutive year. But the growth has "lost its momentum", after 2.2 percent in 2016 and 2017, according to Destatis.
Germany's exports continued to increase in 2018, but not as strongly as in the previous year, when exports and imports grew by 4.6 percent and 4.8 percent, respectively.
Price-adjusted exports of German goods and services were 2.4 percent higher than in 2017, while German imports went up by 3.4 percent in the same period.
The fall in growth could primarily be attributed to "Germany's key industry, the automotive sector, which is not getting its problems under control," explained Claus Michelsen, an economist at the German Institute for Economic Research (DIW).
German car manufacturers are still struggling with the consequences of the WLTP (Worldwide Harmonized Light Vehicle Test Procedure) recertification of their models, which appears to be "putting the brakes on the economy as a whole," Michelsen explained.
The German economy has also suffered from record low water levels in the country's rivers, caused by a long and especially dry summer in 2018. The Kiel Institute for the World Economy (IfW) has estimated that the weak performance of the automotive industry and the bottlenecks in inland waterway transport caused by the low water levels alone reduced Germany's GDP by around 0.5 percent.
In 2018, positive growth impulses came primarily from the German domestic market, according Destatis. Private consumer spending increased by 1.0 percent and government spending was up 1.1 percent. However, these increases were also lower than in the previous years.
Looking ahead, the IfW expects the elimination of negative factors like the introduction of WLTP and the low water levels to "leave room for an intermediate sprint in the first half of 2019."
DIW expert Michelsen sees the pace of growth of the German economy "normalizing" after a period of boom, and expects a "decent growth rate" if risks such as a chaotic Brexit, a new national debt crisis in the euro zone or a trade war between the United States and other economies do not materialize. Enditem
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