Despite positive numbers on German factory orders this morning, Europe’s biggest economy appears to be slowing down pretty fast.
The Bundesbank, Germany’s central bank, slashed its growth forecasts for the economy Friday morning for 2014, 2015, and 2016.
Growth in 2015 is expected to be just 1%, half of the 2% that was previously expected.
The German economy lost considerable momentum in the second and third quarters of 2014 and moved onto a flatter growth path. Following a brisk start to the year, which was partly fuelled by favourable weather conditions, real GDP did not grow any further in the second and third quarters after seasonal and working-day adjustment and thus failed to live up to the hopes of the June outlook.
The run-through is pretty grim. Underlying industrial output is described as “stagnant” and the bank notes that business investment hasn’t really materialised, after getting a boost at the end of 2013.
In the last quarter, German GDP grew by only 0.1%, but the powerhouse economy’s politicians and monetary policymakers are still pretty much staunchly against any extra stimulus.
The Bundesbank expects 1.4% growth for 2014 versus an expected 1.9% and 1.6% growth for 2016 versus and expected 1.8%.