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The impact of economic sanctions – our economic scenario update 9/2014

2014

The European Union's sanctions against Russia are also hitting the German economy. As a Roland Berger survey conducted at the "Leaders' Parliament" in late August found, only just under 29 percent of the German managers polled do not expect the economic sanctions to have any tangible effect on the real economy for 2014 and anticipate a rapid de-escalation of the conflict in Ukraine. By contrast, more than half of respondents believe the crisis will last some considerable time and think that growth will fall by up to half a percentage point. A good 16 percent of the managers expect it to fall by even more than that. In their latest economic scenario, the experts from Roland Berger Strategy Consultants therefore revised their previous forecast of 2.0 percent economic growth slightly downward. For the full year 2014 they now anticipate growth of 1.7 percent.

However, the Roland Berger economic scenario remains optimistic in comparison with other forecasts, which expect growth to slacken more. "Had the economic sanctions not been tightened, we would not have revised our forecast at all," said Prof. Burkhard Schwenker, the reason being: "With its industrial expertise and its strength, the German economy has held up well in the face of unfavorable developments in countries like Japan or Brazil. The current geopolitical situation brings additional uncertainties, though." This is something that is also reflected in the way the Roland Berger Uncertainty Indicator has developed, having risen from 2.0 to 3.0 since the last economic scenario dating from spring 2014 and now ranging in the "moderate uncertainty" category.

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