The wide range reflects the major uncertainty surrounding Germany at the moment, not least with the recent political issues. Ifo notes that if Germany fails to overcome structural challenges, then the economy will grow by only 0.4% next year. But if the right economic policy is adopted, then it can achieve growth of up to 1.1%.
"At the moment, it is not yet clear whether the current phase of stagnation is a temporary weakness or one that is permanent and hence a painful change in the economy."
The latest forecast is quite the change compared to their previous forecast in September for the economy to grow by 0.9%.
This article was written by Justin Low at
www.forexlive.com.
