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Jan 11 2013

Is Bundesbank’s Jobless Rate Forecast Too Sanguine?

The Bundesbank’s latest forecast shows a darkening outlook for the German economy, as it expects slowing export growth and negative-to-flat GDP growth in the fourth quarter of 2012 and the first quarter of 2013. However, in an economy where exports account for half of GDP, the German central bank does not expect unemployment to be affected much.

ECRI’s analysis determines if the Bundesbank’s seemingly incongruous predictions can be reconciled, and provides a definitive outlook for the trajectory of the German unemployment rate.