BDI expecting growth just below two percent

Despite persistent risks, the Federation of German Industries (BDI) is expecting stable economic growth. However, the upswing is being driven too much by consumption instead of by necessary investment. That was the criticism made by BDI President Ulrich Grillo in Berlin on Wednesday.

“This year the BDI is anticipating a real increase in economic output of just under two percent”, said Grillo in Berlin on Wednesday. “The favourable trend in the labour market can be expected to continue in the current year.”

The causes of the boom are lower oil prices, historically low interest rates and a weak euro. “When less has to be spent on refuelling the car and heating the home, but there is no reward for saving, then people spend more money”, said Grillo. But this trend is not sustainable.

“Geopolitical insecurities are unusually high, the emerging economies are flagging – all these factors are having an increasing impact on our economy”, warned Grillo. The investment ratio in Germany is still falling short of its potential. “Our nation is facing tremendous challenges. I am concerned that because of the refugee question the government is blind to these challenges because it is stuck in crisis mode.”

  The BDI President demanded more investment, both public and private: “The investment offensive needs to step up a few gears. We need plenty of extra impetus – in the new energy policy, for digitization and in transport.”