BERLIN: Deutsche Bank hiked its GDP forecasts for Germany on Friday — in part because of the dramatic increase in migration the country is recording.
GDP will rise by 1.9% this year according to the bank’s economists, rather than the 1.7% they had been forecasting before.
That’s largely down to a 0.5 percentage point hike in their forecast for consumption, driven by low oil prices, the euro strengthening slightly and the enormous number of people arriving in the country.
Consumption would also receive a further boost from immigration. Given the political situation in the major countries of origin the influx of refugees will slow little from this year’s 1m-plus. However, recent legal changes will likely reduce chances of acceptance as a refugee, and force more people to return. Rough calculations based on avg. expenditures of EUR 12 000 per person/year show that consumption (private and public) could increase by some EUR 12bn. Even taking hinted public expenditure cuts elsewhere into account that could add around 1⁄2 pp to private consumption
Net migration in Germany has been surging in recent years — it was negative as recently as six years ago, but is now clearly positive, with around half a million more people coming to the country than leaving in 2014:
