The relevant sentiment barometers are now pointing to a considerable deterioration in the business climate. The businesses surveyed reduced their expectations by far more than their assessment of the current situation, so the stream of bad news from Germany’s economy might well continue for some time to come.
And contrary to our December forecast, the dip in growth looks set to continue into the current year. So from today’s perspective, the German economy will probably grow at well below the potential rate of 1½% in 2019. As you can see, I’m not trying to gloss things over. But at the same time, there’s no reason for excessive pessimism.