The International Monetary Fund predicts that Germany, Europe’s largest economy, will be the only advanced economy to shrink this year. It has forecast a German contraction of 0.3 per cent compared to 0.9 per cent growth on average for others in the survey.
As with official forecasts, the Ifo survey of 9,000 managers flagged as the main problems weak purchasing power, emptying industry order books and a slowdown in the Chinese economy – on top of the tighter monetary policy from the European Central Bank. “If impulses are not to be expected from industry or private consumption, the German economy is likely to remain in difficulty.”
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