The global financial turmoil is turning into an economic crisis for Germany, which faces the risk of no growth and increased unemployment in 2009, Moritz Doebler, business editor for Der Tagesspiegel, told the Oct. 10 symposium.
“Patience, education and energy” will be the keywords in assessing prospects for the Germany economy, Doebler said.
That outlook has become increasingly unclear, with the International Monetary Fund this month revising its 2009 growth forecast for Germany downward to zero percent, he told the audience. Germany is forecast to perform below average within the euro zone, he added.
Even though Japan’s growth forecast has similarly been revised downward, the impact is expected to be much harder on Germany — because of its heavy reliance on exports, he said.
Germany, the world’s biggest exporter, relies for about 38 percent of its gross domestic product on exports — much higher than Japan’s roughly 15 percent.
Its dependency on fossil fuel energy is a double killer, Doebler said.
Germany is transferring zillions of its wealth to oil-producing countries for its energy imports, he said.
Also, machinery and cars account for about 40 percent of German export goods — the demand for which would be affected by higher global energy prices, he added.
The country may have to review the components of its exports because cars in demand overseas may no longer be the same kind of vehicles produced by German automakers, he added.
Moves are emerging among German firms to wait on capital investments given such uncertainties, he said.
It is feared an economic downturn will take a heavy toll on employment, Doebler said. Although the number of jobless people in Germany has declined since it topped 5 million and hit a postwar high in early 2005, the situation could become worse as the crisis hits home, he said.
As the prospect for Germany’s future growth has become murky, at least one thing appears certain — the country needs to invest more in higher education, Doebler said.
While industrialized nations remain ahead of emerging economies in terms of technology, the latter group is catching up, and the only possibility for countries like Germany to keep ahead will be to spend much more on education, he said.
Doebler said higher education in Germany cannot be described as being in the world’s top ranks and that its spending on education in terms of per-GDP percentage is far from sufficient.