The Irrelevant German Consumer
With global rebalancing set to be high on the agenda at the next G-7 and G-20 meetings, Germany, with its persistent export surplus, will again come under pressure to boost household demand. But the German consumer is a sideshow, while the main acts are investment demand and monetary policy.
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MUNICH – With global rebalancing set to be high on the agenda at the next G-7 and G-20 meetings, Germany, with its persistent export surplus, will again come under pressure to boost domestic demand and household consumption. But the German consumer is a sideshow. What is needed is an investment surge in Germany and Europe, and a coordinated exit from ultra-loose monetary policies.