Despite the drop in German industrial production in November and December, the German economy is still able to show an increase of 0.3% in the fourth quarter. The growth of domestic demand helped rectify the situation, helping to compensate for the problematic statistics on exports. It turns out that much of the economic growth was due to the influx of more than a million immigrants, and that was the driver for domestic consumption in the country.
In general, the population of Germany, as well as all over Europe, is gradually aging, and now the industry is faced with almost half a million vacant jobs, which is why the influx of migrants are increasingly in Berlin called a boon for the economy. Many companies are now willing to grant migrants jobs and free education, as it is quite difficult to find those wishing to work in the factories among the local population.
According to forecasts, the population of Germany's 82 million could be reduced by 15% by year 2050 with a drawdown of the workforce that could reach 30%. Perhaps it is because of this data, Angela Merkel, did not set any limits on the reception of refugees. However, there is also the other side of the coin, since most of the migrants do not speak German, and have very low qualifications, which will require years for their integration into society.
Approximately 8% of the refugees will be able to find a job within the first year of their stay in Germany, and every unemployed person will cost taxpayers approximately 12,000 euros per year. According to data from the DIW institute, this is not charity, because all the costs will be reimbursed within 5-10 years, because every year more and more refugees to find employment, which means they will soon become taxpayers.
Moreover, by 2030, today's refugees who by then will have time to become citizens will earn an additional 0.5% to the German GDP. The integration of refugees into German society also creates additional jobs, as it requires more teachers in language schools and at various courses of improvement of qualifications of the newcomers. It seems Germany found a solution to their demographic problems in the refugees.
In the short-term, the Eurodollar could return to a downward movement. Some recent statistics for the euro area are more positive, but still insufficient for a tangible economic recovery. In addition, in a recent speech, Janet Yellen has admitted the possibility of negative interest rates in the United States, following the example of Japan and Europe, but did so with the caveat that it is not even being considered yet. However, we are unlikely to see the expected increase of the key Fed rate to 1.5% by the end of this year, therefore the bearish trend in the euro has a significant chance of continuing.
RoboForex Analytical Department
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