Four major German economic think tanks cut their growth forecasts for the country on Thursday due to the more sluggish expansion in emerging markets and increasing risks for the global economic recovery.
The non-profit research groups Ifo institute, DIW, IW and RWI, said in their autumn growth forecasts that German gross national product (GDP) would now grow in 2013 by 0.4%, compared to their 0.8% prior spring estimate.
For 2014, they revised the growth estimate down slightly to 1.8%, from the prior 1.9%.
The think tanks noted that the pick-up in growth from 2013 to 2014 would be driven by the increase in domestic demand, with a 1.4% rise in private consumption and gains of 7% in capital investments such as machinery.
Event as current German Chancellor Angela Merkel is undergoing talks to form a coalition government with the opposition Social Democratic Party (SPD), the four institutes warned against the implementation of a minimum wage in Germany. SPD is trying to make an €8.50 per hour salary a part of the coalition agreement.
"A blanket minimum wage that applies to all sectors and all regions would probably have significantly more negative consequences for the labor market than the current sectoral deals," the four think tanks noted in their report.
The non-profit research groups Ifo institute, DIW, IW and RWI, said in their autumn growth forecasts that German gross national product (GDP) would now grow in 2013 by 0.4%, compared to their 0.8% prior spring estimate.
For 2014, they revised the growth estimate down slightly to 1.8%, from the prior 1.9%.
The think tanks noted that the pick-up in growth from 2013 to 2014 would be driven by the increase in domestic demand, with a 1.4% rise in private consumption and gains of 7% in capital investments such as machinery.
Event as current German Chancellor Angela Merkel is undergoing talks to form a coalition government with the opposition Social Democratic Party (SPD), the four institutes warned against the implementation of a minimum wage in Germany. SPD is trying to make an €8.50 per hour salary a part of the coalition agreement.
"A blanket minimum wage that applies to all sectors and all regions would probably have significantly more negative consequences for the labor market than the current sectoral deals," the four think tanks noted in their report.
