Germany ‘Getting Better,’ But Economy Still Divided: Ifo’s Fuest

The video discusses the outlook for the German economy in 2020, highlighting improvements in services and construction, while manufacturing struggles. The US-China phase one trade deal is seen as a positive factor, easing trade tensions and boosting optimism. Concerns about US tariffs on German goods have diminished, with trade wars between the US and Europe unlikely. Domestic political uncertainty in Germany is not expected to significantly impact the economy, as the Grand Coalition is likely to continue, and new elections would not cause major disruptions.

What sectors in the German economy are performing well in 2020?

• Manufacturing and Services

• Construction and Services

• Manufacturing and Construction

• Agriculture and Services

How do companies view the future of the German economy?

• They expect it to worsen

• They are uncertain

• They expect improvements in six months

• They believe it will remain the same

What is one reason for increased optimism among German companies?

• Lower interest rates

• Increased domestic demand

• A new government in Germany

• The US-China phase one deal

Why is a trade war between the US and Europe considered unlikely?

• The US prefers to focus on Asia

• Trade is less asymmetric than US-China trade

• Europe is not a major trading partner

• The US has nothing to lose

What has been the focus of the Grand Coalition in Germany?

• Expanding the welfare state

• Boosting manufacturing

• Reducing taxes

• Increasing exports