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Economic outlook for Germany not that promising after all?

The Plansecur financial consulting company has come up with a markedly less optimistic assessment of the prospects of the German economy as compared with those given by other German economic institutes which base their evaluation on the development of the GDP (see our entry from Monday). According to Plansecur the growth reflected by recent GDP figures is based on non-recurring effects such as the coming VAT increase rather than on a sustained recovery of the German economy.

According to a Plansecur survey among 280 financial experts, about one half of the people questioned (51 percent) expect the German economy to struggle with even more problems than today in future. 46 percent believe that the German economy will be marked at least by stagnation over the next 20 years.

In the long run, according to the findings of the study, it is unlikely that Germany will again be the engine for growth in Europe. Only 16 percent of financial experts surveyed think the German economy to be capable of growth rates similar to those reached in times of prosperity during the 1980s when Germany had grown at rates that were among the highest in Europe.

In the opinion of the financial experts the development of the German economy is to a large extent dependent on political decisions. Thus, the biggest influence on the economy is attributed to a necessary reform of the social security system (according to 98% of experts asked), and 92 percent think that the tax systems needs to be simplified. Other important factors are said to be the easing of general wage agreements (84%), a reduction of non-wage labour costs (81%) as well as an increase of weekly working hours (67%). The study can be ordered by team@dripke.de or by fax: +49 611 71 92 90. GERMAN