No one wants to say it; but Germany's long-term prognosis is poor

Schroders chief economist, Keith Wade, discusses how the slowdown in China is yet to reveal its true impact on German companies, and how the recent influx of immigrants could put budget policy at risk

An optimistic assessment of the German economy and a sense of relief that the Greek crisis is back under control provided a positive backdrop to my recent trip to the country, which took place just before the Volkswagen scandal broke. However, although no one wanted to say it, the longer-term prognosis for Germany looks poor. The slowdown in China and emerging markets presents a major challenge when the growth model is based on a significant manufacturing sector that has benefitted enormously from the emergence of China and growth in the emerging markets.   Germany is increasing its l...