Drawing showing powerful Germany struggling with weights

German growth sputters: Should Europe brace for trouble?

  • Germany is suffering from inadequate productivity growth
  • In the longer term, German entrepreneurs will respond by relocating production abroad
  • This scenario will help keep German companies competitive but bodes ill for the European economy

The latest data on Germany’s economic performance is not particularly encouraging. After having grown at an average quarterly rate of some 0.5 percent for the past five years, the country’s gross domestic product declined by 0.2 percent in the third quarter. In truth, this decline was expected, so that the predictions for full-year growth in 2018 are currently confirmed at about 1.7 percent, down from 2.2 percent in 2017.

Growth during the next two years is expected to remain below the 2 percent threshold, and some observers fear it might drop to about 1.5 percent. The slowdown is not dramatic, since this year’s German growth is only slightly below the European Union’s average of some 1.9 percent. Yet, two issues justify concern.

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Professor Enrico Colombatto
Many EU exporters rely on German leadership to open up export markets in the rest of the world
read more about it in the report
What's inside
  • Germany is suffering from inadequate productivity growth
  • In the longer term, German entrepreneurs will respond by relocating production abroad
  • This scenario will help keep German companies competitive but bodes ill for the European economy
Who will benefit?
  • Report is targeted to the decision makers in cross country manufacturing – suppliers, manufacturers, logistics.
  • Also considered useful for the administrative university facilities, to better understand the possibe effects of current decisions.
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