Research Detail
| 2023/10/12 / Erste Group Research |
Why is Germany's economy so weak? Germany's economy has already been stuck in a phase of stagnation for several quarters. A comparison with the growth momentum of the Eurozone shows that Germany's growth has already been below-average compared with the other Eurozone countries since mid-2021. In our view, Germany's high dependence on manufacturing and global trade play a key role in this development. While the average contribution of the manufacturing sector to value added in the Eurozone is around 17%, Germany's contribution is significantly higher at 21%. The end of this week marks the deadline for EU countries to submit their budget drafts for next year and the years ahead to the European Commission for assessment. Of the major countries, Italy and France seem likely to show little effort to reduce their deficits. The Maastricht criteria are currently suspended, but only until spring 2024. However, it is open whether or how quickly these budget rules will be fully reinstated. There will probably be a heated debate about this within the EU next year. In any case, more pressure for budgetary discipline should be assumed for next year. |
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General information
| Author | Erste Group Research |
| Date | 2023/10/12 |
| Language |  |
| Product name | Week ahead |
| Topic in focus | Macro/ Fixed income |
| Economy in focus | Eurozone, United States |
| Currency in focus | Euro, US Dollar |
| Sector in focus | - |
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