AXA IM: The road ahead for Germany

AXA IM: The road ahead for Germany

19 februari 2025

Politiek Duitsland
Duitsland

According to François Cabau, Senior Eurozone Economist at AXA Investment Managers, Germany is poised to revamp its policies, and positive effects are expected to materialise, albeit with a lag.

In his most recent macroeconomic research, Cabau provides a preview for the upcoming German elections:

"What the polls indicate and forecasting how they could turn into actual Bundestag seats, comes with a high level of uncertainty. However, we believe the CDU is likely to return to the Chancellery. But finding a coalition partner to form a stable majority in the Bundestag is unlikely to be a straightforward task.

Political party manifestos all point towards pro-growth measures, but compromise points are not obvious, and as such any agreement may take time – even more so given that easing Germany’s fiscal stance is likely to prove contentious, both politically and technically.

Time is of the essence in terms of getting the economy firing again, and it faces both short and medium-term headwinds.

While we welcome the expectation of change to the German economic policy stance, which should help lower the uncertainty hurting growth, we think any positive effects are likely to come with a significant lag."

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