Both the general collapse brought on by the 2009 economic crisis and Germany's record-breaking recovery caught people here by surprise. The consensus among economists for 2013 is that Germany will face steep challenges -- though fewer than those expected in many other countries.
Most economists have already revised downwards their forecast for this year and are even presuming a contraction in economic growth for the final quarter of 2012. The prediction now is for a slight growth in performance in 2013 and -- most importantly -- that the country will avert a recession.
It's an outlook cautiously shared by most German business leaders. According to the Munich-based Institute for Economic Research (Ifo), the current business climate index is poor, but expectations for the next six months have improved significantly.
That sentiment is not rock solid, however. "We measure the uncertainty by determining how wide the variations between companies are in assessing the current situation," warns Ifo chief economist Kai Carstensen. "And that differential has recently increased considerably."
Such uncertainty may seem odd, since the situation is noticeably calmer than at the outset of the financial crisis. The collapse of the United States real estate market in 2008 sent tremors through the global economy, severely affecting German companies.
Yet that drama had the silver lining -- at least from a business perspective -- of having a clear cause and effect. Now, economic growth is dependent on several, much more amorphous factors, such as:
- The euro crisis
- The US and Chinese economies
- Domestic consumption and investment in Germany
The euro crisis is particularly complex and confusing, and thus threatening, to companies. A recent survey of chief executives conducted by the German news agency DPA found that, unanimously, their biggest wish for 2013 was an end to the crisis.
2 comments:
Gary Rieschel
Founder, Qiming Venture Partners
GDP growth: 7 percent
Inflation: 4 percent
Outlook:
Focus should be less on the rate of GDP growth and more on the value of business opportunities.
US economy could move into recession again, if first quarter growth is flat.
Shanghai Composite Index could hit 3000.
Steve Brice
Chief investment strategist, Standard Chartered Bank
GDP growth: 7.7 to 7.8 percent
Inflation: 4 to 5 percent
Outlook:
Chinese stock market is undervalued and could see rapid gains.
Europe could see growth in the second half.
Chinese residential property market could see robust growth.
Goolam Ballim
Group chief economist, Standard Bank
GDP growth: 7.5 percent
Inflation: 4 percent
Outlook:
No end to financial crisis until the end of the decade when the new normal will be a shift of economic power to the East as well as Africa.
China is now front and center for Africa's economic fortunes.
Global growth needs to become stable, even if weak, before recovery can begin.
George Magnus
Senior economic adviser, UBS
GDP growth: 7.5 to 8 percent
Inflation: 4 percent
Outlook:
China still risks investment bust and lower growth in the medium term because of difficulties in weaning itself on an infrastructure-led growth model.
Western economies can expect Japan-like long-term levels of growth and near-zero interest rates set to remain.
China has endemic inflation problem with wages rising faster than money.
Junheng Li
Founder, J.L. Warren Capital
GDP growth: 6 to 7 percent
Inflation: below 2 percent
Outlook:
Further bleak news for Shanghai Composite Index, which will be flat in 2013 and could see dramatic falls in 2014.
Healthcare and education stocks could be strong sectors for investment.
China GDP could fall below 7 percent but the government should avoid fiscal stimulus.
Miranda Carr
Head of China research, NSBO
GDP growth: 7.5 to 8 percent
Inflation: 3 percent
Outlook:
China growth should improve on weak 2012 GDP figures.
Real estate already showing signs of a rebound from April 2012 low.
A lot of domestic demand will still be driven by urbanization.
Mark Williams
Chief Asia economist, Capital Economics
GDP growth: 8 percent
Inflation: 3 percent
Outlook:
China growth will revive in 2013 but won't last unless there is further fiscal stimulus.
Eurozone area will contract by 2.5 percent and show signs of cracking apart. Options for kicking the can down the road running out.
US will gradually pull itself out of the mire during 2013.
China Daily
Michael Fallon, the Business and Enterprise Minister, told The Sunday Telegraph that he was “going to war” on the issue of late payments after hearing complaints from small and medium-sized businesses.
Many have to wait up to 180 days to be paid for services they provide to larger companies and the minister revealed that he had been told of one well-known company that had a payment process approaching 200 days.
Today The Sunday Telegraph and The Daily Telegraph launch a major campaign on the issue of late payments, which have reached record highs of more than £36.5bn.
Before Christmas, Steve Sutherland, a business owner from Huddersfield, revealed that he had pulled out of contracts with Balfour Beatty because of their payment policies.
In response to his story, many business owners contacted The Telegraph to reveal their own problems with payment terms. Since the financial crisis, payment terms have been extended by many companies.
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