ECB can ease again if inflation remains weak - German institutes

The official forecasts from the German economic institutes

We had the heads up on the German economic institutes raising of German growth forecasts (2016) yesterday and now they're out in full.

  • 2016 GDP 1.9% vs 1.6% prior

  • 2017 1.4% vs 1.5% prior

  • 2018 1.6%

  • German Q3 GDP likely to be lower than Q2's 0.4% mainly on weaker foreign demand

  • German government should focus more on growth oriented investments rather than spending that boosts welfare and consumption

  • If inflation remains weak the majority of institutes believe further monetary stimulus is justified

  • ECB should wait and weigh the impact of policy already implemented and not announce a further expansion of bond buying

Perhaps you wouldn't believe these are Germans speaking when they get behind more easing. However, that's reeled in somewhat by the wait and see message.

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