FRANKFURT, Dec. 13 (Xinhua) -- The German central bank Bundesbank on Friday revised down its biannually published projections of German economic growth for 2019 and 2020, while expecting a rebound in the years thereafter.
Bundesbank said it expects calendar-adjusted real gross domestic product (GDP) to grow by 0.5 percent in 2019, lower than the 0.6-percent projection made in June. The 2020 growth is forecast to be 0.6 percent, significantly lower than the 1.2-percent forecast six months ago.
The central bank said that domestic demand "will not rise as dynamically as in the boom period of previous years," because households' real disposable income will increase at a slower pace than before, largely on account of much weaker employment growth.
However, the central bank said that exports are expected to "slowly but surely shake off stagnation" and increase strongly over the course of 2020 in keeping with foreign demand, landing GDP growth forecast at 1.4 percent for both 2021 and 2022.
The Bundesbank economists put the inflation rate at 1.4 percent this year, and a temporarily weakened 1.3 percent in the coming year due to falling energy prices. Inflation is forecast to pick up strongly to 1.6 percent and 1.9 percent in 2021 and 2022 respectively.
The German economy just narrowly avoided a technical recession in the third quarter this year and grew by 0.1 percent, after shrinking 0.1 percent in the second quarter. Whereas latest exports data may provide some signs of relief, a slump of 1.7 percent in industrial production in October showed that the general picture is far from optimistic.
Bundesbank however sees no reason to expect that Germany will slide into recession, as "the first tentative signs that industry is gradually picking up are emerging," pointing to improved business and export expectations as well as the orders situation which did not deteriorate any further.
